[Federal Register Volume 59, Number 58 (Friday, March 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6749]
[[Page Unknown]]
[Federal Register: March 25, 1994]
_______________________________________________________________________
Part II
Department of the Interior
_______________________________________________________________________
Office of the Secretary
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43 CFR Part 11
Natural Resource Damage Assessments; Final Rule
DEPARTMENT OF THE INTERIOR
Office of the Secretary
43 CFR Part 11
RIN 1090-AA22
Natural Resource Damage Assessments
AGENCY: Department of the Interior.
ACTION: Final rule.
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SUMMARY: This final rule amends the regulations for assessing natural
resource damages resulting from a discharge of oil into navigable
waters under the Clean Water Act or a release of a hazardous substance
under the Comprehensive Environmental Response, Compensation, and
Liability Act. The Department of the Interior has previously developed
two types of natural resource damage assessment regulations: standard
procedures for simplified assessments requiring minimal field
observation (the type A rule); and site-specific procedures for
detailed assessments in individual cases (the type B rule).
This final rule revises the type B rule to comply with all but one
aspect of a court order. This rule establishes a procedure for
calculating natural resource damages based on the costs of restoring,
rehabilitating, replacing, and/or acquiring the equivalent of injured
resources. This rule also allows for the assessment of all use values
of injured resources that are lost to the public pending completion of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources. The Department will soon issue a new proposed
rule to address assessment of lost nonuse values of injured resources.
EFFECTIVE DATE: The effective date of the final rule is April 25, 1994.
FOR FURTHER INFORMATION CONTACT: Mary C. Morton, Cecil Hoffmann, or
David Rosenberger at (202) 208-3301.
SUPPLEMENTARY INFORMATION: This preamble is organized as follows:
I. Background
A. Statutory Provisions
B. Regulatory History
C. Judicial Review
D. Implementation of the Court Order
E. Other Rulemakings
II. Overview of this Final Rule
A. Measure of Damages
B. Restoration and Compensation Determination Plan
C. Resources Covered by the Natural Resource Damage Assessment
Regulations
D. Other Significant Issues
III. Response to Comments
A. General Comments Concerning this Rulemaking
B. Overall Damage Assessment Process
C. Resources Covered by the Natural Resource Damage Assessment
Regulations
D. Trustee Coordination
E. Preliminary Estimate of Damages
F. Reasonable Cost of an Assessment
G. Calculation of Baseline
H. Measure of Damages
I. Restoration, Rehabilitation, Replacement, and/or Acquisition
of Equivalent Services Versus Resources
J. Selection of a Restoration, Rehabilitation, Replacement, and/
or Acquisition Alternative
K. Costs of Restoration, Rehabilitation, Replacement, and/or
Acquisition of Equivalent Resources
L. Compensable Value
M. Date of Promulgation of the Natural Resource Damage
Assessment Regulations
N. Judicial Review of an Assessment
O. Use of Collected Damages
P. Miscellaneous Comments
I. Background
A. Statutory Provisions
The Clean Water Act, as amended (33 U.S.C. 1251 et seq.) (CWA) and
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. 9601 et seq.) (CERCLA) authorize
natural resource trustees to recover compensatory damages for injury
to, destruction of, or loss of natural resources resulting from a
discharge of oil into navigable waters or a release of a hazardous
substance. CWA sec. 311(f); CERCLA sec. 107. Federal and State
officials may be designated to serve as natural resource trustees under
CERCLA and CWA. CERCLA also recognizes the authority of Indian tribes
to commence actions as natural resource trustees.
Damages may be recovered for those natural resource injuries and
losses that are not fully remedied by response actions. All sums
recovered in compensation for natural resource injuries must be used to
restore, rehabilitate, replace, or acquire the equivalent of the
injured natural resources. Trustee officials may also recover the
reasonable costs of assessing natural resource damages and any
prejudgment interest.
CERCLA requires the promulgation of two types of regulations for
the assessment of natural resource damages resulting either from a
discharge of oil under CWA or from a release of a hazardous substance
under CERCLA. CERCLA sec. 301(c). The type A regulations provide
standard procedures for simplified assessments requiring minimal field
observation. The type B regulations provide site-specific procedures
for detailed assessments. Both regulations identify the best available
procedures for determining natural resource damages. Assessments
performed by Federal and State trustee officials in accordance with
these regulations receive a rebuttable presumption in court. CERCLA
sec. 107(f)(2)(C). The promulgation of these regulations was delegated
to the Department of the Interior (the Department). E.O. 12316, as
amended by E.O. 12580.
The Oil Pollution Act (33 U.S.C. 2701 et seq.) (OPA) was signed
into law on August 18, 1990. Among other things, OPA amended the
natural resource damage provisions of CWA. OPA authorized the National
Oceanic and Atmospheric Administration (NOAA) to develop new natural
resource damage assessment regulations for discharges of oil into
navigable waters. The Department is coordinating its rulemakings with
NOAA to ensure, to the maximum extent possible, that consistent
processes are established for assessing natural resource damages under
CERCLA and OPA. OPA provides that until NOAA develops its regulations,
the Department's regulations may be used to assess natural resource
damages under OPA. OPA sec. 6001(b). NOAA published a proposed natural
resource damage assessment rule on January 7, 1994. 59 FR 1062.
B. Regulatory History
The Department has issued various final rules for the assessment of
natural resource damages: 51 FR 27674 (Aug. 1, 1986); 52 FR 9042 (March
20, 1987); 53 FR 5166 (Feb. 22, 1988); and 53 FR 9769 (March 25, 1988).
These rulemakings are all codified at 43 CFR part 11.
The natural resource damage assessment regulations provide an
administrative process for conducting assessments as well as technical
methods for the actual identification of injuries and calculation of
damages. Under the regulations, both type A and type B, assessments
consist of four major phases.
The first phase of an assessment conducted under the regulations
involves the activities that precede the actual assessment. For
example, upon detecting or receiving notification of a discharge or
release, trustee officials perform a preassessment screen to ascertain
whether further assessment actions are warranted.
The second phase involves the preparation of an Assessment Plan.
The Assessment Plan, which is subject to public review and comment,
assists the involvement of potentially responsible parties (PRPs),
other trustee officials, the general public, and any other interested
parties. The Assessment Plan also ensures that assessments are
performed at a reasonable cost.
In the third phase, trustee officials conduct the work described in
the Assessment Plan. The work involves three steps: Injury
Determination; Quantification; and Damage Determination. In Injury
Determination, trustee officials determine whether any natural
resources have been injured. If trustee officials determine that
resources have been injured, they proceed to Quantification, in which
they quantify the resulting reduction in services provided by the
resources. Finally, in Damage Determination, trustee officials
calculate the monetary compensation to be sought as damages for the
natural resource injuries.
In a type A assessment, trustee officials perform Injury
Determination, Quantification, and Damage Determination through the use
of standardized procedures involving minimal field work. The Department
has adopted a phased approach to developing type A procedures for
different environments. Only one type A rule has been developed to
date. The existing type A rule provides for the use of a computer model
to assess damages from small releases or discharges in coastal or
marine environments. For other releases or discharges, trustee
officials conduct a type B assessment, in which Injury Determination,
Quantification, and Damage Determination are performed through the use
of a range of alternative scientific and economic methodologies.
The fourth phase of every natural resource damage assessment,
whether the type A or type B rule is followed, consists of post-
assessment activities such as: Preparation of a Report of Assessment;
establishment of an account for damage assessment awards; and
development of a Restoration Plan for use of the awards.
C. Judicial Review
A party may petition the Court of Appeals for the District of
Columbia Circuit to review any regulation issued under CERCLA. CERCLA
sec. 113(a). A number of parties filed such petitions for review of the
natural resource damage assessment regulations. The type A rule was
challenged in State of Colorado v. United States Department of the
Interior, 880 F.2d 481 (D.C. Cir. 1989) (Colorado v. Interior). The
type B rule was challenged in State of Ohio v. United States Department
of the Interior, 880 F.2d 432 (D.C. Cir. 1989) (Ohio v. Interior).
The court in Ohio v. Interior upheld various challenged aspects of
the type B rule but did remand three issues. The court ordered the
Department to revise the rule to reflect the statutory preference for
using restoration costs as the measure of natural resource damages. The
court used the term ``restoration costs'' to encompass the cost of
restoring, rehabilitating, replacing, and/or acquiring the equivalent
of the injured natural resources. The court also ordered the Department
to revise the rule to allow for the recovery of all reliably calculated
lost values of injured natural resources, including both lost use
values and lost nonuse values, with no specific hierarchy of
methodologies required of trustee officials in estimating those values.
Use values are derived through activities such as hiking or fishing.
Nonuse values are not dependent on use of the resource. Nonuse values
include existence value, which is the value of knowing that a resource
exists, and bequest value, which is the value of knowing that a
resource will be available for future generations. Finally, the court
asked the Department to clarify whether the natural resource damage
assessment regulations apply to natural resources that are not actually
owned by the government.
D. Implementation of the Court Order
The Department published an advance notice of proposed rulemaking
on September 22, 1989, to announce its intent to revise the type B rule
to comply with Ohio v. Interior. 54 FR 39016. The Department issued a
proposed rule on April 29, 1991, with comments requested by June 28,
1991. 56 FR 19752. On July 2, 1991, the Department extended the comment
period to July 16, 1991. 56 FR 30367. On July 22, 1993, the Department
reopened the comment period to allow consideration of additional
comments, including newly developed information on the contingent
valuation methodology (CV), the only method currently available for the
express purpose of estimating nonuse values. 58 FR 39328. The comment
period was originally reopened until September 7, 1993, and then
extended until September 22, 1993. 58 FR 45877 (Aug. 31, 1993).
After reviewing the comments received in response to the July 22,
1993, Federal Register notice, the Department has decided to issue a
final rule addressing all aspects of the Ohio v. Interior remand other
than the assessment of lost nonuse values. The Department is
considering revising the type B rule to include certain standards to
improve the reliability of CV when used to calculate lost nonuse
values. In order to ensure that interested parties have an adequate
opportunity for review and comment, the Department will soon publish
the standards in a notice of proposed rulemaking. Pending completion of
that rulemaking, the Department is temporarily leaving unchanged the
remanded language of the original type B rule concerning assessment of
lost nonuse values.
E. Other Rulemakings
CERCLA mandates biennial review and revision, as appropriate, of
the natural resource damage assessment regulations. The Department
plans to publish an advance notice of proposed rulemaking to begin the
biennial update of the type B rule in July 1994. All aspects of the
administrative process and the type B rule will be subject to review
during that update. During the biennial review, the Department will
consider ways of ensuring the greatest possible consistency between its
damage assessment regulations and the damage assessment regulations
being developed by NOAA.
Further, the Department plans to publish a proposed rule to revise
the type A procedure for coastal and marine environments in compliance
with Colorado v. Interior in November 1994. The Department is also
developing an additional type A procedure for assessing damages in the
Great Lakes. Like the type A procedure for coastal and marine
environments, the type A procedure for the Great Lakes will incorporate
a computer model. The Department expects to publish a proposed rule for
the type A procedure for the Great Lakes in August 1994.
II. Overview of This Final Rule
A. Measure of Damages
The type B rule as originally published on August 1, 1986, provided
that damages consisted of the lesser of the cost of restoring the
injured resources or the diminution in the value of the injured
resources without restoration. In Ohio v. Interior, the court ordered
the Department to revise the rule to reflect the statutory preference
for using restoration costs as the measure of natural resource damages.
CERCLA provides that sums recovered in natural resource damage actions
may be used to restore, rehabilitate, replace, or acquire the
equivalent of the injured natural resources. The court used the simple
term ``restoration'' costs as shorthand for the cost of performing any
of these actions. 880 F.2d at 441. In many cases, trustee officials
will likely use damage awards to fund some combination of these
actions, rather than only one. Therefore, the final rule allows trustee
officials to recover the costs of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources in all cases.
The court recognized the Department's authority to establish
* * * some class of cases where other considerations--i.e.
infeasibility of restoration or grossly disproportionate cost to use
value--warrant a [measure of damages other than the costs of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources]. Id. at 459.
However, the Department believes that trustee officials will always
perform some, albeit occasionally minor, form of restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources. Even in situations where natural recovery is the preferred
action, trustee officials will nonetheless incur some costs, such as
the expense of restricting public access or taking other actions to
ensure that natural recovery is not impeded. Therefore, the final rule
does not include any exceptions to the basic measure of damages.
Moreover, the rule also provides trustee officials with the discretion
to add to the basic measure of damages the value of the resource
services lost to the public from the date of the discharge or release
until restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources has been completed.
B. Restoration and Compensation Determination Plan
To assist trustee officials in developing claims under the new
measure of damages, the rule provides for the development of a
Restoration and Compensation Determination Plan. The Restoration and
Compensation Determination Plan replaces the Restoration Methodology
Plan discussed in the original version of the rule. The Restoration and
Compensation Determination Plan is designed to focus the scope of
Damage Determination. The Restoration and Compensation Determination
Plan is part of the overall Assessment Plan and, thus, subject to
public review and comment.
1. Selection of a Restoration, Rehabilitation, Replacement, and/or
Acquisition Alternative
Since damages are based on the costs of restoring, rehabilitating,
replacing, and/or acquiring the equivalent of the injured resources,
trustee officials need a mechanism for projecting these costs. The rule
includes a procedure for selecting a restoration, rehabilitation,
replacement, and/or acquisition alternative that can be used in this
projection.
Under the rule, trustee officials first identify and consider a
reasonable number of possible alternatives for restoring,
rehabilitating, replacing, and/or acquiring the equivalent of the
injured resources. Trustee officials also estimate those services that
are likely to be lost to the public pending completion of each
alternative under consideration. Trustee officials then select one of
the possible alternatives. The rule lists factors that trustee
officials must consider during the selection. The relative weight of
these factors is left to the discretion of the trustee officials.
Trustee officials document their decisions in the Restoration and
Compensation Determination Plan.
2. Calculation of the Costs of Restoration, Rehabilitation,
Replacement, and/or Acquisition of Equivalent Resources
Once the trustee officials select a restoration, rehabilitation,
replacement, and/or acquisition alternative, they must choose the
methods they intend to use to estimate the costs of implementing that
alternative. To do this, trustee officials select among the specific
cost estimating methodologies provided in the rule. The rule provides a
number of criteria to guide the selection of cost estimating
methodologies, including a requirement that the chosen methodologies
are reliable for the particular incident and type of damage being
measured. Trustee officials include the rationale for their selection
in the Restoration and Compensation Determination Plan.
3. Calculation of Compensable Value
Under this rule, the costs of restoring, rehabilitating, replacing,
and/or acquiring the equivalent of the injured resources are the basic
measure of damages; however, these costs are only one component of the
damages that trustee officials may assess. Trustee officials also have
the discretion to assess the value of the services that the public lost
from the date of the release or discharge until completion of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources. The final rule uses the term ``compensable
value'' to encompass all of the lost public economic values, including
lost use values and lost nonuse values such as existence and bequest
values. The Restoration and Compensation Determination Plan includes a
description of the valuation methodologies trustee officials intend to
use when estimating compensable value during Damage Determination.
a. Use values. The original type B rule provided a ranked list of
valuation methodologies that could be used to calculate lost use
values. If the market for the injured resource was ``reasonably
competitive,'' then the diminution of the market price attributable to
the discharge or release was used to estimate damages. If a market-
price methodology was not available, then the trustee officials were
required to use appraisal methodologies. Only when neither market-price
nor appraisal methodologies were appropriate for the resources being
assessed did the original version of the rule allow trustee officials
to use non-market-based methodologies.
The court ruled that the hierarchy of valuation methodologies
incorrectly established a strong presumption in favor of market-price
and appraisal methodologies. The proposed rule continued to rank
valuation methodologies according to reliability but allowed trustee
officials to use any of the methodologies whenever they wanted,
notwithstanding the ranking. In light of potential confusion over the
practical effect of the ranking in the absence of any restrictions on
trustee officials' selections, the Department has eliminated the
ranking from the final rule. The final rule leaves trustee officials
free to choose any of the specified valuation methodologies. The rule
provides a number of criteria to guide the selection of valuation
methodologies, including a requirement that the chosen methodologies
are reliable for the particular incident and type of damage being
measured. Trustee officials include the rationale for their selection
in the Restoration and Compensation Determination Plan.
b. Nonuse values. Sections 11.83(b)(2) and 11.83(d)(5)(ii) of the
original version of the type B rule provided that lost nonuse values
could only be assessed if trustee officials could not determine any
lost use values. In the August 1, 1986, preamble to the original type B
rule, the Department provided the following explanation for this
restriction:
Ordinarily, option and existence values would be added to use
values. However, section 301(c) of CERCLA mentions only use values.
Therefore, the primary emphasis in this section is on the estimation
of use values. 51 FR 27719.
Ohio v. Interior held that the Department had ``erroneously
construed the statute,'' stating:
[S]ection 301(c)(2) requires Interior to ``take into
consideration factors including, but not limited to * * * use
value.'' 42 U.S.C. Sec. 9651(c)(2) (emphasis added). The statute's
command is expressly not limited to use value; if anything, the
language implies that DOI is to include in its regulations other
factors in addition to use value. 880 F.2d at 464.
The court went on to say that the Department--
* * * is entitled to rank methodologies according to its view of
their reliability, but it cannot base its complete exclusion of
option and existence values on an incorrect reading of the statute.
Id.
The court instructed the Department to consider a rule that would
permit trustee officials to include all reliably calculated lost values
in their damage assessments. Id.
CV is currently the only method available for the express purpose
of estimating nonuse values. CV can also be used to calculate use
values. Under the original type B rule, CV was listed as a non-market-
based methodology for calculating either lost use values or lost nonuse
values. Ohio v. Interior held that the Department's decision to include
CV as a best available procedure was not improper. Id. at 478. However,
the court did not require the Department to allow unlimited use of CV.
Moreover, the court did not address the difference between use of CV to
calculate lost use values and use of CV to calculate lost nonuse
values.
The Department received numerous comments on the use of CV. These
comments focused on use of CV to estimate lost nonuse values rather
than lost use values. In the April 29, 1991, notice of proposed
rulemaking, the Department stated that ``[w]hen CVM is used to quantify
use values alone, it is judged to be just as reliable as the other
nonmarket valuation methodologies.'' 56 FR 19762. Commenters did not
dispute this assertion and have not provided any information to the
contrary, even though the Department specifically solicited ``reviews
of CVM that address its reliability for measuring use values'' in the
July 22, 1993, Federal Register notice. 58 FR 39329. Thus, this final
rule allows trustee officials to use CV to assess lost use values
subject only to the restrictions applicable to any of the listed
methodologies for assessing lost use values. However, during the
upcoming biennial review of the type B rule, the Department will
reconsider whether additional standards for the use of CV to estimate
lost use values are appropriate.
Nonuse values, unlike use values, are not linked to behavior and,
thus, are more difficult to validate externally than use values.
Therefore, the Department will soon be issuing a proposed set of
standards to improve the reliability of CV when used to estimate lost
nonuse values. This final rule renumbers Secs. 11.83(b)(2) and
11.83(d)(5)(ii) of the original rule, which restrict the assessment of
lost nonuse values to cases where lost use values cannot be determined,
as new Secs. 11.83(c)(1)(iii) and 11.83(c)(2)(vii)(B), respectively.
However, pending completion of the rulemaking concerning assessment of
lost nonuse values, the Department is temporarily leaving unchanged the
language of renumbered Secs. 11.83(b)(2) and 11.83(d)(5)(ii), which was
remanded by Ohio v. Interior.
C. Resources Covered by the Natural Resource Damage Assessment
Regulations
The final issue remanded by Ohio v. Interior concerns the scope of
the resources covered by the rule. The rule as originally published
incorporated the statutory definition of ``natural resources.'' This
definition encompasses any resource--
Belonging to, managed by, held in trust by, appertaining to, or
otherwise controlled by the United States * * *, any State or local
government, any foreign government, or any Indian tribe, or, if such
resources are subject to a trust restriction on alienation, any
member of an Indian tribe. CERCLA sec. 101(16).
The court in Ohio v. Interior noted that, although CERCLA does not
authorize recovery of damages for injuries to purely private resources,
the statutory definition of ``natural resources'' is clearly not
limited to resources literally owned by a government. 880 F.2d at 460.
Similarly, in its oral argument in Ohio v. Interior, the Department
recognized that applicability of CERCLA's natural resource damage
provisions does not hinge solely on ownership. Id. at 461. However, the
August 1, 1986, preamble to the final type B rule stated that ``section
101(16) of CERCLA clearly indicates that privately owned natural
resources are not to be included in natural resource damage
assessments.'' 54 FR 27696. Therefore, the court asked the Department
to clarify whether the natural resource damage assessment regulations
may be used to assess damages for injuries to any resources that are
not owned by the government.
The Department never intended to suggest that the applicability of
the regulations hinges solely on ownership of a resource by a
government entity. The rule is available for assessments of all natural
resources covered by CERCLA, which under the plain language of the
statute includes more than just resources owned by the government.
Section 11.14(z), which was not affected by this rulemaking,
incorporates the statutory definition of ``natural resource.'' The rule
does not interpret this statutory definition. This final rule does,
however, add a requirement that trustee officials prepare statements
explaining the bases for their assertions of trusteeship. This
statement must be included both in the Notice of Intent to Perform an
Assessment, which is sent to PRPs, and in the Assessment Plan, which is
subject to public review and comment.
D. Other Significant Issues
This final rule addresses two additional issues related to the
court order:
(1) Development of a preliminary estimate of damages; and
(2) The date of promulgation of the natural resource damage
assessment regulations.
1. Preliminary Estimate of Damages
Under Sec. 11.35 of the rule as originally published, the
determination of the appropriate measure of damages was made in the
Economic Methodology Determination. In the Economic Methodology
Determination, trustee officials were required to estimate both the
costs of restoring the injured resources and the diminution in the
value of the injured resources without restoration. The smaller value
served as the measure of damages. The Economic Methodology
Determination was then used to help trustee officials develop an
Assessment Plan.
Under this final rule, damages always include the costs of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources. Therefore, the Department has eliminated the
Economic Methodology Determination. However, the Economic Methodology
Determination served a function that is still relevant under the
revised rule. CERCLA provides that trustee officials may recover the
costs of performing an assessment, but only if those costs are
reasonable. Under the definition of ``reasonable cost'' in
Sec. 11.14(ee), which was not affected by this rulemaking, the
anticipated cost of the assessment must be expected to be less than the
anticipated damage amount. Under the original rule, the damage
estimates developed during the Economic Methodology Determination
helped trustee officials design their Assessment Plans so that this
standard was met. In order to continue assisting trustee officials in
performing assessments at reasonable costs in the absence of the
Economic Methodology Determination, this final rule requires trustee
officials to prepare a preliminary estimate of damages before they
begin the development of an Assessment Plan.
2. Date of Promulgation of the Natural Resource Damage Assessment
Regulations
CERCLA provides that natural resource damage claims other than
those involving Federal facilities or sites on the National Priorities
List must be commenced by Federal and State trustee officials:
* * * within 3 years after the later of the following:
(A) The date of the discovery of the loss and its connection
with the release in question.
(B) The date on which regulations are promulgated under section
301(c). CERCLA sec. 113(g)(1).
Neither the language nor the legislative history of CERCLA defines the
date of promulgation of the natural resource damage assessment
regulations under section 301(c).
There has been considerable confusion over this statutory provision
in the aftermath of Ohio v. Interior and Colorado v. Interior. The
natural resource damage assessment regulations are designed to
calculate a monetary damage figure for injuries to natural resources.
Ohio v. Interior and Colorado v. Interior remanded a fundamental issue,
namely the measure of damages. Until the court orders are fully
implemented, trustee officials are left without a complete procedure
for calculating damages consistent with the provisions of CERCLA.
Therefore, the Department has amended the rule to clarify that for the
purposes of section 113(g)(1) of CERCLA, the ``date on which
regulations are promulgated'' is the date on which final rules revising
both the type A rule and the type B rule in compliance with Ohio v.
Interior and Colorado v. Interior are published.
III. Response to Comments
The Department received numerous comments on the July 22, 1993,
Federal Register notice. The Department appreciates the time and effort
expended by the commenters. This notice does not address any of the
comments received concerning the use of CV to calculate lost nonuse
values. Those comments will be addressed in the Department's upcoming
notice of proposed rulemaking to revise the original language of the
type B rule concerning the assessment of nonuse values.
With respect to comments outside the confines of the Ohio v.
Interior remand, the Department has for now simply reproduced guidance
provided in prior Federal Register notices and indicated that further
clarification is beyond the scope of this rulemaking. During the
upcoming biennial review, the Department will carefully consider all of
the comments submitted during this rulemaking that were beyond the
scope of the court remand. Commenters need not resubmit these comments
during the biennial review.
A. General Comments Concerning this Rulemaking
1. Scope of This Rulemaking
Comment: Some commenters objected to the Department's decision to
defer consideration of certain issues until the next biennial review.
These commenters stated that all matters relating to the measure of
damages should be addressed in this rulemaking.
Response: As was explained in the April 29, 1991, notice of
proposed rulemaking, the Department decided to limit this rulemaking to
the court order in light of the potentially wide-ranging issues that
will be considered during the biennial review. The Department believes
that it has considered all issues within the scope of the Ohio v.
Interior remand.
2. Timing of This Rulemaking
Comment: Several commenters expressed concern that the Department
was proceeding too slowly on implementation of Ohio v. Interior and
Colorado v. Interior and commencement of the biennial review.
Response: Implementation of Ohio v. Interior and Colorado v.
Interior and commencement of the biennial review have involved
considerable, time-consuming analysis and coordination. The Department
has been proceeding, and will continue to proceed, as expeditiously as
possible.
3. Goal of This Rulemaking
Comment: One commenter stated that the Department had failed to
articulate clear goals for this rulemaking. This commenter offered
suggestions on possible goals, including promotion of timely, cost-
effective restoration. Another commenter requested that the Department
attempt to eliminate ambiguity and vagueness from the rule in order to
reduce transaction costs.
Response: Section 11.11, which was not affected by this rulemaking,
states that the purpose of the regulations is to provide standardized
and cost-effective procedures for assessing natural resource damages.
The Department has indicated that the primary goal of this particular
rulemaking is to revise the type B rule to comply with Ohio v.
Interior. The Department believes that promotion of timely, cost-
effective restoration and elimination of ambiguity and vagueness are
worthy objectives and has attempted to further those objectives to the
extent possible within the context of addressing the court order. The
Department will consider whether additional revisions are necessary
during the upcoming biennial review.
4. Regulatory Impact Analysis
Comment: A few commenters disagreed with the Department's statement
that this rulemaking is not ``major'' under Executive Order 12291 and,
thus, does not require preparation of a Regulatory Impact Analysis.
These commenters challenged a number of aspects of the Determination of
Effects prepared for the proposed rule.
Response: Executive Order 12291 has been rescinded since the
Department prepared the Determination of Effects for the proposed rule.
This final rule has been reviewed under Executive Order 12866 and has
been determined to constitute a significant regulatory action. However,
because of the difficulty of evaluating the effects of alternatives to
this rule, the Office of Information and Regulatory Affairs within the
Office of Management and Budget has waived preparation of the
assessments described in sections 6(a)(3)(B) and 6(a)(3)(C) of
Executive Order 12866 for the final rule.
5. Status of Prior Unpublished Notice of Final Rulemaking
Comment: A number of commenters objected to the publication of the
July 22, 1993, Federal Register notice on the ground that the
Department had already sent a notice of final rulemaking to the Office
of the Federal Register in January, 1993, that was never published.
Response: The Department acknowledges that its former Assistant
Secretary-Policy, Management and Budget sent a notice of final
rulemaking to the Office of the Federal Register in January, 1993. The
Department retrieved the notice from the Office of the Federal Register
before it was filed out of concern that proper procedures had not been
followed in connection with its preparation. Most notably, the notice
improperly referred to and relied upon information received outside the
comment period and had not received proper Departmental clearance. The
Department, therefore, believes it was appropriate to retrieve the
notice and publish the July 22, 1993, Federal Register notice to reopen
the comment period.
B. Overall Damage Assessment Process
1. Trustee Discretion
Comment: A number of commenters addressed the level of discretion
that the proposed rule would afford trustee officials. Many commenters
thought that trustee officials are in the best position to determine
how to proceed at a specific site and praised the flexibility of the
proposed rule. On the other hand, several commenters thought that the
rule would delegate too much authority to trustee officials. These
commenters stated that the language and legislative history of section
301(c) of CERCLA, through reference to ``protocols,'' ``best available
procedures,'' and ``most accurate and efficient procedures,'' require
that the Department develop substantive objective standards. According
to these commenters, the proposed rule relies upon subjective standards
that will lead to arbitrary and capricious results. These commenters
expressed concern that the Department was placing too much reliance on
public review and comment to curb potential abuses of discretion by
trustee officials.
Response: The Department believes the rule appropriately balances
the need for objective procedures against the need for flexibility. In
order to comply with the statutory requirement to identify best
available procedures for assessing natural resource damages, the
Department has developed a detailed, standardized process that
incorporates a specific range of acceptable alternative methodologies.
However, the type B rule was also intended to have broad application.
Natural resource damage cases range from situations involving discrete
injury of one resource caused by a small, incidental release of a
single substance to incidents involving extensive injury of multiple
resources caused by large, long-term releases of mixtures of
substances. In light of the myriad of possible natural resource damage
scenarios, a type B rule that mandates a particular course of action at
each stage of every assessment would generally be unusable or result in
unreasonable assessment costs. Therefore, in certain areas the rule
allows trustee officials to use their best judgment.
Although trustee officials do have some discretion, the rule
imposes a number of checks on that discretion. The rule requires
trustee officials to document the rationale for their decisions. The
rule also provides an opportunity for public comment and review of
trustee officials' actions, which the Department believes will ensure a
significant level of accountability for trustee officials. Also, the
Department notes that all decisions made by trustee officials will
ultimately be reviewable in court. Therefore, the rule includes
criteria by which courts can evaluate trustee decisions.
2. Public and PRP Involvement
Comment: Several commenters voiced opinions about the opportunity
for PRP and public participation in the assessment process. Some
commenters stated that the proposed rule would provide an appropriate
level of public and PRP participation. Other commenters thought that
the Department should encourage earlier involvement of PRPs to
encourage settlement and avoid duplication of effort. A few commenters
suggested that the rule be revised to clarify that trustee officials
are authorized to allow PRPs to conduct assessment work.
Response: This final rule does not affect the level or timing of
PRP or public participation in the natural resource damage assessment
process. The Department agrees that early participation of PRPs in the
assessment process promotes amicable settlement of natural resource
damage claims but does not think that any revisions of the rule are
necessary in this regard.
Section 11.32(d) already provides trustee officials with the
discretion to allow PRPs to conduct assessment work. However, as was
stated in the August 1, 1986, preamble:
The Department's intention has always been that the decision to
allow or not to allow potentially responsible parties to participate
in the implementation of the Assessment Plan should rest solely with
the authorized official, or the lead authorized official, when
appropriate.
Furthermore, a decision to allow such participation should only
be made when the authorized official believes that a fair and
accurate damage assessment will result from the potentially
responsible party's participation and will be ensured through
adequate direction, guidance, and monitoring by the authorized
official * * *. The Department emphasizes that any and all actions
taken by potentially responsible parties to implement an Assessment
Plan occur under the ultimate approval and authority of the
authorized official acting as trustee. The potentially responsible
party functions in a strictly ministerial role. The final choice of
methodologies rests solely with the authorized official. 51 FR
27704.
Further clarification is beyond the scope of this rulemaking.
3. Separate Assessments for Each Injury
Comment: Some commenters stated that the rule should encourage
trustee officials to perform separate assessments for each injury in
order to facilitate settlement.
Response: Natural resources are generally highly interdependent.
The selection of methods to address one injured resource will often
affect the selection of methods to address other resources. Therefore,
the rule leaves it to the discretion of the trustee officials whether
separate assessments should be conducted for each injury. Further
clarification is beyond the scope of this rulemaking.
4. Focus of Assessments
Comment: Some commenters stated that the Department should take
precautions to ensure that trustee officials do not undertake
unnecessary basic research when performing damage assessments. These
commenters suggested that the Department provide a list of sources of
existing scientific data and prohibit trustee officials from performing
new research unless there are no existing data regarding the effect of
the particular substance on the particular natural resources involved.
Response: As was noted in the August 1, 1986, preamble to the
original type B rule:
General research studies are not compensable under a damage
assessment performed pursuant to this rule, since it is
inappropriate that experimental research studies to advance general
scientific understanding be included as a part of a specific natural
resource damage claim. 51 FR 27710.
Further clarification is beyond the scope of this rulemaking.
C. Resources Covered by the Natural Resource Damage Assessment
Regulations
Comment: There were numerous comments on the issue of the resources
covered by the natural resource damage assessment regulations. Several
commenters supported the Department's proposal not to define which
privately owned resources are covered by the regulations. These
commenters stated that the question of whether a particular resource is
covered by the regulations is governed by a wide variety of Federal,
State, local, and tribal laws that are constantly evolving. These
commenters further stated that trustee officials are the most familiar
with these laws and, therefore, are in the best position to determine
whether a particular resource is covered by the regulations.
On the other hand, several commenters thought that the regulations
should include some limits on the assessment of damages for injuries of
privately owned resources in order to avoid overly broad claims and
unnecessary litigation. Some of these commenters stated that the
Department had misinterpreted Ohio v. Interior and that the court did
ask the Department to clarify which privately owned resources are
covered by the regulations.
Response: The Department believes that the Ohio v. Interior court
did not require or even request the Department to define precisely
which privately owned resources are covered by the natural resource
damage assessment regulations. The court merely asked for clarification
of whether the Department intended the regulations to cover any non-
government-owned resources.
The scope of resources covered by the natural resource damage
assessment regulations is determined by section 101(16) of CERCLA,
which defines ``natural resources'' as:
[L]and, fish, wildlife, biota, air, water, ground water,
drinking water supplies, and other such resources belonging to,
managed by, held in trust by, appertaining to, or otherwise
controlled by the United States * * *, any State or local
government, any foreign government, any Indian tribe, or, if such
resources are subject to a trust restriction on alienation, any
member of an Indian tribe.
As the court noted, this definition, which is incorporated into
Sec. 11.14(z) of the rule, extends beyond resources that are actually
owned by the government.
Use of the natural resource damage assessment regulations is not
restricted to government-owned resources. Trustee officials can use the
regulations to assess damages for all natural resources covered by
CERCLA. The Department believes that no additional action is needed to
comply with the court order.
Not only is development of a definition of the privately owned
resources covered by the regulations not required by Ohio v. Interior,
it is also impractical. The question of whether a trustee official can
assess damages for a particular natural resource is governed by CERCLA.
However, CERCLA provides that trustee officials can only recover
damages for injuries to those resources that are related to them
through ownership, management, trust, or control. These relationships
are created by other Federal, State, local, and tribal laws. In light
of the diversity of these other laws, the Department believes that the
determination of whether a particular privately owned resource
constitutes a natural resource under CERCLA is best addressed on a
case-by-case basis.
The Department disagrees that lack of a definition of the privately
owned resources covered by the regulations will result in overly broad
claims and unnecessary litigation. This final rule requires a trustee
official to prepare a statement explaining the basis for his or her
assertion of trusteeship. This statement must be included both in the
Notice of Intent to Perform an Assessment, which is sent to PRPs, and
in the Assessment Plan, which is subject to public review and comment.
These opportunities for early input from PRPs and the public provide
both a check on the trustee officials' discretion and a means of
resolving disputes prior to litigation. Other provisions of the
regulations, such as the requirement that only committed public uses of
resources be included in compensable value, provide additional
protection against improper assertions of authority over private
property.
Comment: There were also many comments on the Department's proposal
to clarify that a trustee official's statement of his or her basis of
authority is not entitled to a rebuttable presumption. Several
commenters supported this proposal. These commenters noted that a
trustee official's basis of authority is an issue of legal standing to
sue rather than an issue of assessment of damages. These commenters
also stated that it was particularly appropriate not to grant a
rebuttable presumption to a trustee official's statement since the rule
contained no standards for determining which privately owned resources
are covered by this rule.
On the other hand, a number of commenters thought that the
rebuttable presumption should apply to a trustee official's statement
of his or her basis of authority. These commenters stated that one of
the first steps that a trustee official takes in an assessment is the
determination of whether the affected resources fall under his or her
trusteeship. These commenters noted that nothing in CERCLA indicates
that this rule should restrict the rebuttable presumption to certain
aspects of an assessment.
Response: In light of the fact that the Department has decided not
to provide guidance on the scope of resources covered by the
regulations, the Department does not believe that a trustee official's
statement of authority should be given a rebuttable presumption.
Section 11.31(a)(2) has been revised to clarify this point.
Comment: One commenter noted that in the July 22, 1993, Federal
Register notice, the Department referred to the ``Federal, State,
local, and tribal laws'' that give rise to trusteeship. The commenter
sought clarification of whether local governments could bring natural
resource damage claims and whether States could bring natural resource
damage claims on behalf of local governments.
Response: The Department refers to local laws that may give rise to
trusteeship because the statutory definition of ``natural resource''
mentions resources belonging to, managed by, held in trust by,
appertaining to, or otherwise controlled by any local government. This
rule does not address local governments' standing to sue for natural
resource damages. However, at least one court has held that a local
government could not bring a natural resource damage claim, relying in
part on State law. Werlein v. United States, 746 F. Supp. 887, 910 (D.
Minn. 1990). Ohio v. Interior states that CERCLA allows State trustee
officials to recover damages for injured resources owned by, managed
by, appertaining to, or otherwise controlled by a local government. 880
F.2d at 460 n. 43.
Comment: Some commenters requested that the rule be revised to
require trustee officials to provide detailed statements of authority.
Response: The Department believes that a trustee official's
statement of authority, like all statements required under the
regulations, should be detailed enough to provide PRPs, other trustee
officials, the general public, any other interested parties, and
ultimately the courts with an adequate opportunity to evaluate the
statement. The level of detail may vary depending on the resources
involved. The Department does not believe that any revision of the rule
is necessary.
Comment: A few commenters had questions about the application of
the rule to specific resources. One commenter asked the Department to
clarify that a tribal trustee official has authority to assert claims
for natural resource damages no matter where the natural resources are
located so long as the trustee official can establish trusteeship.
Response: Nothing in these regulations prevents a Federal, State,
or tribal trustee official from assessing damages for injuries to any
natural resources, regardless of their location, so long as the trustee
official can establish trusteeship over the resource.
Comment: Other commenters raised questions about the Department's
discussion of cultural and archaeological resources. Some commenters
disagreed with the Department's statement that cultural and
archaeological resources do not constitute natural resources under
CERCLA. Other commenters agreed that such resources are not natural
resources. However, these commenters disagreed with the Department's
statement that trustee officials are allowed to factor the loss of
archaeological and cultural attributes of a natural resource into a
natural resource damage assessment through consideration of the loss of
services provided by that natural resource. These commenters stated
that consideration of archaeological and cultural services provided by
a natural resource was tantamount to treating archaeological and
cultural resources as natural resources in violation of the statute.
One commenter requested that the Department clarify that an injury to
an archaeological or cultural resource in and of itself is not a basis
for a natural resource damage claim.
Response: As was explained in the July 22, 1993, Federal Register
notice, the Department acknowledges the confusion that has arisen as a
result of multiple uses and meanings of the term ``resource'' under
different statutes. ``Archaeological'' and other ``cultural'' resources
are not ``land, fish, wildlife, biota, air, water, ground water,
drinking water supplies, [or] other such resources.'' Therefore,
``archaeological'' and ``cultural'' resources do not constitute
``natural'' resources under CERCLA.
Nevertheless, although archaeological and cultural resources, as
defined in other statutes, are not treated as ``natural'' resources
under CERCLA, the rule does allow trustee officials to include the loss
of archaeological and other cultural services provided by a natural
resource in a natural resource damage assessment. For example, if land
constituting a CERCLA-defined natural resource contains archaeological
artifacts, then that land might provide the service of supporting
archaeological research. If an injury to the land causes a reduction in
the level of service (archaeological research) that could be performed,
trustee officials could recover damages for the lost service. Further
clarification is beyond the scope of this rulemaking.
D. Trustee Coordination
Comment: There were several comments concerning trustee
coordination. A number of commenters wrote in support of the trustee
coordination provisions in the rule. A few commenters thought that the
rule should place greater emphasis on trustee coordination and provide
additional guidance on how trustee officials can coordinate most
effectively.
Response: Trustee coordination is discussed in Sec. 11.32(a)(1),
which was not affected by this rulemaking. Further clarification is
beyond the scope of this rulemaking.
Comment: Several commenters raised questions about designation of a
lead authorized official. Some commenters asked the Department to
revise Sec. 11.32(a)(1)(ii)(A) to prohibit an official from an agency
that is both a trustee and a PRP from being designated as the lead
authorized official. Another commenter stated that the lead authorized
official should be selected on a case-by-case basis according to which
agency has the greatest interests at stake.
Response: Revision of the procedures for appointing a lead
authorized official contained in Sec. 11.32(a)(1)(ii)(A) is beyond the
scope of this rulemaking.
Comment: One commenter questioned why the Department had raised the
issue of collateral estoppel in the July 22, 1993, Federal Register
notice.
Response: The Department referred to collateral estoppel in
response to a comment. The commenter thought that requiring Federal
trustee officials to use the natural resource damage assessment
regulations would eliminate collateral estoppel problems. The
Department responded that revising the optional nature of the
regulations was beyond the scope of this rulemaking and, moreover,
would not necessarily resolve potential collateral estoppel problems.
E. Preliminary Estimate of Damages
Comment: The commenters who addressed the issue of the preliminary
estimate of damages agreed that an estimate of damages is needed to
determine the proper scope of an assessment and to ensure the
reasonableness of assessment costs. Several commenters thought that
trustee officials should be required to disclose the preliminary
estimate as soon as possible to ensure that the public and the PRPs
have an opportunity to comment on the reasonableness of projected
assessment costs. One commenter stated that trustee officials should be
required to consult with the PRPs when developing the preliminary
estimate.
Response: The Department believes that premature disclosure of the
preliminary estimate might adversely affect the ability of trustee
officials to settle or litigate a natural resource damage case.
Therefore, the Department has revised the language of proposed
Sec. 11.35(d)(3) to clarify that trustee officials need not disclose
the preliminary estimate until the assessment has been completed.
Even though the preliminary estimate is not disclosed until the end
of the assessment, PRPs and the general public will still have a
meaningful opportunity to comment on the reasonableness of assessment
costs. Under Sec. 11.14(ee), which was not affected by this rulemaking,
the relationship between anticipated damages and anticipated assessment
costs is only one factor of reasonable costs. Another factor is whether
all aspects of the assessment directly contribute to the calculation of
a monetary damage figure. The public and the PRPs need not know the
preliminary estimate of damages to comment on whether an assessment
satisfies this factor of reasonableness. Moreover, after the assessment
has been completed, trustee officials are required to include the
preliminary estimate in the Report of Assessment, which will allow PRPs
and courts to evaluate whether anticipated damages exceeded anticipated
assessment costs.
Nothing in the rule prevents trustee officials from consulting with
PRPs during the development of the preliminary estimate. However, the
Department believes that requiring trustee officials to do so could
adversely affect their ability to settle or litigate their claims.
Comment: Some commenters thought that the preliminary estimate
should always be completed before publication of the Assessment Plan.
Other commenters thought that the Department should provide additional
guidance on when delay of preparation of a preliminary estimate would
be warranted.
Response: The Department acknowledges the importance of the
preliminary estimate in ensuring that the Assessment Plan is
appropriately focused. However, the Department believes that trustee
officials should have discretion to delay completion of the preliminary
estimate until the end of Injury Determination if insufficient data
exist upon which to base an estimate. The Department realizes that in
some cases the injuries might be so complex or the existing data might
be so sparse that any preliminary estimate of damages would be
meaningless until Injury Determination is complete. The Department does
not believe that additional guidance on this topic is needed.
Comment: A few commenters suggested that trustee officials be
allowed to develop a range of preliminary estimates rather than one
specific estimate. These commenters expressed concern that if required
to develop a specific number, trustee officials would be likely to
develop a high preliminary estimate, which would then encourage them to
find damages at least as high as the preliminary estimate, regardless
of the actual damages.
Response: The Department does not think that a range of preliminary
estimates would provide an adequate standard for evaluating whether
assessment costs are reasonable. Also, the Department does not believe
that development of a specific preliminary estimate will encourage
trustee officials to develop exaggerated damage claims, particularly
since the preliminary estimate of damages may be revised as new
information becomes available.
F. Reasonable Cost of an Assessment
Comment: A number of commenters expressed support for the existing
definition of ``reasonable cost.'' However, other commenters thought
that the definition should be revised so that the reasonableness of
assessment costs is determined by comparing the cost of each component
of the assessment to the anticipated damages to be determined by that
component.
Response: The definition of ``reasonable cost'' contained in
Sec. 11.14(ee) was upheld in Ohio v. Interior after thorough review.
Revision of the definition is beyond the scope of this rulemaking.
Comment: A few commenters suggested that the Department add a list
of specific practices that would render assessment costs unreasonable.
Response: Section 11.15(a)(3) of the rule specifies different types
of expenses that constitute reasonable costs of an assessment. The only
revision to Sec. 11.15(a)(3) that is being made in this rulemaking is a
substitution of the phrase ``restoration'' with the phrase
``restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources.'' Additional changes to Sec. 11.15(a)(3) are
beyond the scope of this rulemaking.
Comment: One commenter expressed concern that trustee officials
might sacrifice scientific accuracy in order to meet the standards of
reasonable cost.
Response: The Department believes that the rule adequately ensures
scientific accuracy. Also, as discussed above, the definition of
``reasonable cost'' contained in Sec. 11.14(ee) was upheld in Ohio v.
Interior after thorough review.
Comment: Some commenters stated that reasonable assessment costs
should include attorneys' fees. A few commenters thought that if
attorneys' fees were included as recoverable assessment costs, then the
Department should clarify that trustee officials may recover only those
attorneys' fees necessary for the assessment not those related to
preparation and litigation of a natural resource damage claim. One
commenter expressed confusion about what the Department meant when it
stated in the July 22, 1993, Federal Register notice that trustee
officials may recover only those costs that are associated with the
actual assessment.
Response: As noted in the August 1, 1986, and the July 22, 1993,
Federal Register notices, the Department believes that trustee
officials will generally need the assistance of an interdisciplinary
team of experts when performing natural resource damage assessments.
The rule does not restrict recoverable assessment costs to the expenses
of particular types of professionals. Section 11.60(d)(2), which was
not affected by this rulemaking, provides that recoverable assessment
costs are ``limited to those costs incurred or anticipated by the
authorized official for, and specifically allocable to, site specific
efforts taken in the assessment of damages.'' Therefore, if attorneys
are involved in work specifically allocable to an assessment, the
resulting attorneys' fees are recoverable as assessment costs under the
rule. The rule does not address the recovery of attorneys' fees
incurred in litigation over the results of the damage assessment, as
opposed to those incurred during the assessment itself.
G. Calculation of Baseline
Comment: There were a variety of comments about the calculation of
baseline. A number of commenters supported the Department's proposal to
revise Sec. 11.82(b)(1)(i) to clarify that baseline represents the
conditions that would have existed had the release or discharge not
occurred rather than the conditions that existed prior to the discharge
or release.
Response: As noted in the July 22, 1993, Federal Register notice,
the definition of baseline, which was not affected by this rulemaking,
is set forth at Sec. 11.14(e):
Baseline means the condition or conditions that would have
existed at the assessment area had the discharge of oil or the
release of the hazardous substance under investigation not occurred.
Section 11.82(b)(1)(i) of the proposed rule inadvertently described
restoration and rehabilitation actions as actions taken to return a
resource to baseline as measured by ``the services previously
provided.'' Section 11.82(b)(1)(i) of the final rule has been revised
to conform with the definition in Sec. 11.14(e).
Comment: A number of commenters sought additional guidance on how
to determine baseline in industrial areas, particularly how to
distinguish the effects of the release or discharge in question from
the effects of other conditions.
Response: Sections 11.72(c) through (k), which were not affected by
this rulemaking, provide considerable guidance on the calculation of
baseline. Additional clarification is beyond the scope of this
rulemaking.
Comment: There were a few comments about the discussion in the July
22, 1993, Federal Register notice concerning the appropriate baseline
for a river that in addition to being injured by a hazardous substance
release also regularly receives sewer overflows that do not constitute
hazardous substance releases under CERCLA. Some commenters noted that
the Department stated that the effects of the sewer overflows did not
render restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources pointless but did affect the baseline condition
that must be reestablished. These commenters sought additional
clarification that PRPs could not be held liable for the cost of
restoring, rehabilitating, replacing, and/or acquiring fish if the
sewer overflows would kill any stocked fish.
Response: Baseline conditions are those that would have existed had
the release or discharge in question not occurred. In the hypothetical
case offered by the commenters, PRPs' liability for stocking fish
depends on whether fish would have existed in the river but for the
release in question. If fish would not survive in the river regardless
of whether the release had occurred, then PRPs would not be liable for
the cost of stocking fish.
H. Measure of Damages
Comment: There were a number of comments on the proposed measure of
damages. Several commenters supported the proposal to allow trustee
officials to recover compensable value in addition to restoration,
rehabilitation, replacement, and/or acquisition costs. However, many
others thought that allowing recovery of compensable value in addition
to restoration, rehabilitation, replacement, and/or acquisition costs
violated the Ohio v. Interior holding that restoration costs are the
preferred measure of damages. These commenters stated that compensable
value should only be recovered when restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources is infeasible
or poses grossly disproportionate costs.
Response: The Department believes that providing trustee officials
with the discretion to assess compensable value is consistent with the
holding in Ohio v. Interior because it will help ensure that the public
is more fully compensated for injuries to natural resources. Ohio v.
Interior did hold that restoration costs are the preferred measure of
damages. However, nothing in the decision prohibits the Department from
allowing trustee officials to assess compensable values in addition to
restoration, rehabilitation, replacement, and/or acquisition costs. In
fact, the court explicitly stated that ``Congress intended the damage
assessment regulations to capture fully all aspects of loss.'' 880 F.2d
at 463. Further, even under Sec. 11.81(b) of the original rule, claims
based on restoration costs could include damages for diminution of use
values during the recovery period.
Comment: Some commenters stated that even if the Department decides
to allow assessment of compensable value for CERCLA claims, it should
not allow assessment of compensable value for CWA claims. These
commenters stated that unlike section 107(a)(C) of CERCLA, which
imposes liability for ``damages for injury to, destruction of, or loss
of natural resources,'' section 311(f)(4) of CWA merely refers to the
``costs of removal,'' which include ``any costs incurred by the Federal
government or any State government in the restoration or replacement of
natural resources.'' Furthermore, these commenters stated that nothing
in the legislative history of CWA suggests that lost use values were
intended to be recoverable.
Response: Although the specific issue raised by these commenters
was not remanded by Ohio v. Interior and is not within the scope of
this rulemaking, the Department believes that compensable values are
recoverable under CWA. CWA provides that damages ``shall include any
costs or expenses incurred by the Federal government or any State
government in the restoration or replacement of natural resources
damaged or destroyed.'' CWA sec. 311(f)(4). Similarly, CERCLA provides
that damages ``shall not be limited by the sums which can be used to
restore or replace such resources.'' CERCLA sec. 107(f)(1). The court
in Ohio v. Interior compared these two provisions and concluded:
These directives are in harmony: restoration is the basic
measure of damages, but damages can exceed restoration cost in some
cases. 880 F.2d at 450.
Comment: Several commenters stated that CERCLA, Ohio v. Interior,
and Commonwealth of Puerto Rico v. SS Zoe Colocotroni, 628 F.2d 652
(1st Cir. 1980), cert. denied, 450 U.S. 912 (1981) (Puerto Rico v. SS
Zoe Colocotroni), require inclusion of an exception from the basic
measure of damages when restoration, rehabilitation, replacement, and/
or acquisition costs are grossly disproportionate to the lost value of
the resource. A number of these commenters disagreed with the
Department's statements in the July 22, 1993, Federal Register notice
that no exceptions were needed because some form of restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
will always be performed.
One commenter questioned the Department's statement in the July 22,
1993, Federal Register notice that consideration of the factors set
forth in proposed Sec. 11.83(a)(3) would ensure that trustee officials
do not select inappropriate restoration, rehabilitation, replacement,
and/or acquisition alternatives. This commenter observed that proposed
Sec. 11.83(a)(3) addresses selection of cost estimating and valuation
methodologies rather than selection of a restoration, rehabilitation,
replacement, and/or acquisition alternative.
A number of other commenters opposed the creation of an exception
for grossly disproportionate restoration, rehabilitation, replacement,
and/or acquisition costs. Some of these commenters urged the Department
to use caution if such an exception were adopted. One commenter
requested that the Department bear in mind the special spiritual and
cultural significance of natural resources to Indian tribes when
developing any such exception. Other commenters urged the Department to
base any such exception on a comparison of restoration, rehabilitation,
replacement, and/or acquisition costs to the total value of the
resources in question rather than the values of the resources lost as a
result of the injuries.
Response: The Department believes it is not necessary to create an
exclusion from the basic measure of damages when restoration,
rehabilitation, replacement, and/or acquisition costs are grossly
disproportionate to the lost value of the injured resources. The
Department agrees that when trustee officials evaluate a particular
restoration, rehabilitation, replacement, and/or acquisition
alternative, they should consider the relationship between the costs of
implementing that alternative and the lost value of the resource.
However, if the costs of implementing a particular alternative do
greatly exceed the lost value of the resource, trustee officials need
not eliminate restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources as a basis for damages but should
instead select a less costly method of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources. Therefore,
Sec. 11.83(a)(3) provides a number of factors for trustee officials to
consider when selecting a restoration, rehabilitation, replacement,
and/or acquisition alternative. These factors, when considered
together, protect against the selection of an alternative that poses
grossly disproportionate costs.
As noted in the July 22, 1993, Federal Register notice, the
Department does not agree that CERCLA, Ohio v. Interior, or Puerto Rico
v. SS Zoe Colocotroni mandate an exclusion from the basic measure of
damages when restoration, rehabilitation, replacement, and/or
acquisition costs are grossly disproportionate to the lost value of the
injured resources. CERCLA and Ohio v. Interior grant the Department the
discretion to develop exceptions to the basic measure of damages but do
not require such exceptions. Puerto Rico v. SS Zoe Colocotroni arose
under a Puerto Rican statute, and although the case does contain dicta
concerning CWA, it did not establish any standards for damages under
either CWA or CERCLA.
Furthermore, Puerto Rico v. SS Zoe Colocotroni focused on whether
damages should be based on the costs of implementing a plan to dig up
and replant an oiled mangrove forest instead of relying upon natural
recovery. The court rejected the plan as ``impractical, inordinately
expensive, and unjustifiably dangerous to the healthy mangroves and
marine animals still present in the area to be restored.'' 628 F.2d at
676.
This rule neither requires nor authorizes trustee officials to
pursue intensive activities to restore or rehabilitate an injured
resource if such activities would be impractical, inordinately
expensive, and unjustifiably dangerous. Under the rule, trustee
officials evaluate a range of alternatives, including an alternative
based on natural recovery, under a set of factors, including technical
feasibility, cost-benefit considerations, cost-effectiveness, and
potential for additional injury. The rule allows trustee officials to
rely upon natural recovery when appropriate. If trustee officials
decide to rely on natural recovery, they will still incur restoration,
rehabilitation, replacement, and/or acquisition costs because they will
take some sort of action, such as restricting public access or
monitoring, to ensure that natural recovery is not impeded.
In the July 22, 1993, Federal Register notice, the Department
inadvertently stated that consideration of the factors set forth in
proposed Sec. 11.83(a)(3) would ensure that trustee officials do not
select a restoration, rehabilitation, replacement, and/or acquisition
alternative that poses grossly disproportionate costs. Section
11.83(a)(3) of the rule addresses selection of cost estimating and
valuation methodologies rather than selection of a restoration,
rehabilitation, replacement, and/or acquisition alternative. The
Department meant to reference the factors set forth in Sec. 11.82(d).
Comment: Some commenters agreed with the Department's proposal to
allow trustee officials to base damages solely on restoration,
rehabilitation, replacement, and/or acquisition costs when there is no
acceptable methodology for calculating compensable value at a
reasonable cost. One commenter, however, urged the Department to
clarify that when trustee officials choose to base damages solely on
restoration, rehabilitation, replacement, and/or acquisition costs,
PRPs should not be allowed to challenge these costs based on their
unilateral calculation of compensable values.
Response: The Department has decided that a trustee official should
have the discretion to base damages solely on the cost of restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
not only when compensable value cannot be calculated at a reasonable
cost but whenever the trustee official deems it appropriate. The
Department has revised the language of Sec. 11.80(b) accordingly. The
rule provides that it is within the trustee official's discretion
whether to base damages solely on restoration, rehabilitation,
replacement, and/or acquisition costs; therefore, PRPs will not be able
to use a unilateral calculation of compensable value to challenge a
damage claim based solely on restoration, rehabilitation, replacement,
and/or acquisition costs.
I. Restoration, Rehabilitation, Replacement, and/or Acquisition of
Equivalent Services Versus Resources
Comment: Despite the Department's attempts to clarify the issue in
the July 22, 1993, Federal Register notice, commenters expressed
continued confusion over whether the Department intended restoration,
rehabilitation, replacement, and/or acquisition of the equivalent to
focus on the resource itself, the services provided by a resource, or
both. Several commenters continued to think that the rule dealt
inconsistently with this issue.
Some commenters thought that the Department should specify that
damages are based on the cost of restoring, rehabilitating, replacing,
and/or acquiring the equivalent of both the services provided by a
resource and the resource itself. These commenters objected to the
Department's statements that service levels provide a means of
measuring restoration, rehabilitation, replacement, and/or acquisition
of equivalent resources. These commenters expressed concern that using
services alone as a measurement would result in less than complete
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources because the loss of potential services might be
left unaddressed.
A few commenters offered an example of a groundwater drinking
supply that previously contained hazardous substances at concentrations
significantly better than required by drinking water standards. The
commenters noted that if service levels are used to measure
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources, then treating the groundwater to the point at
which it meets drinking water standards might be deemed full
restoration, rehabilitation, replacement, and/or acquisition but would
fail to make the public whole. These commenters further stated that
failure to account for potential services when measuring restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
would violate Ohio v. Interior, which stated that ``a trustee is not
prohibited from recovering costs of restoring or replacing a natural
resource even when that resource has no documented `committed use.'''
880 F.2d at 462.
Other commenters stated that service levels should not be viewed
simply as a yardstick for, but rather as the very focus of,
restoration, rehabilitation, replacement, and/or acquisition. These
commenters thought that unless reestablishment of baseline service
levels were used as the standard for restoration, rehabilitation,
replacement, and/or acquisition, PRPs would be required to pay to
replicate the exact natural resources that were injured, contrary to
congressional intent. These commenters requested that the Department
state explicitly that the actual injury need not be corrected if
services can be restored through other means. Some commenters offered
an example of contaminated sediment that destroys vegetation. These
commenters stated that dredging should not be required if the
vegetation can be restored through reseeding or fertilization.
A number of commenters also objected to the Department's statement
that Congress did not intend to allow trustee officials to simply
restore the abstract services provided by a resource through an
artificial mechanism. Some commenters asked the Department to clarify
that its concern lies with creation of an artificial resource rather
than use of a manufactured device to restore the injured resource.
Response: As noted in the July 22, 1993, Federal Register notice,
the Department did not intend to change the focus of restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
in this rulemaking. The Department has always intended restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
to involve actions taken to return a resource to baseline. Apparent
inconsistencies in the rule arise because trustee officials need a
means of measuring injury in order to determine when restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
is complete, and the concept of services provides that means. As was
stated in the August 1, 1986, preamble to the original type B rule:
Traditionally humans have valued natural resources in monetary
terms on the basis of services provided by the resources. This
method logically may be extended to valuing damages to an injured
resource on the basis of changes in services. This rule establishes
the link between measured adverse changes in the condition of the
resource, the injury, and the damages through the measurement of
changes in the services provided by the injured resource. 51 FR
27686.
In other words, although it is the natural resource that trustee
officials are restoring, rehabilitating, replacing, and/or acquiring
the equivalent of, such actions cause an increase in services, and that
increase in services is used to measure the level of restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources.
As evidenced by the statutory provision allowing trustee officials
to acquire equivalent natural resources, Congress did not envision that
trustee officials would, could, or should always replicate the exact
same injured resources. Therefore, the rule gives trustee officials the
discretion to decide, based on consideration of designated factors, how
best to provide the public with natural resources that offer the same
baseline level of services. Further, trustee officials have the
discretion to decide which services to consider when determining the
necessary level of restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources.
The Department does not believe that using baseline service levels
to measure restoration, rehabilitation, replacement, and/or acquisition
of equivalent resources fails to make the public whole. In the
groundwater example offered by the commenters, the resource may well
provide a service other than that of being a drinking water supply. For
example, in the August 1, 1986, preamble to the original type B rule,
the Department noted that one service provided by resources with low
baseline concentrations of hazardous substances or oil is the service
of ``being able to absorb low levels of that material without exceeding
standards or without other effects.'' 51 FR 27716. Trustee officials
have the discretion to consider this and other services when
determining the necessary level of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources.
Also, the Department does not think that using baseline services to
measure restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources violates the Ohio v. Interior holding concerning
committed uses. The term ``committed use,'' which applies only to
calculation of compensable values, refers to human uses of resources.
The definition of ``services,'' which was not affected by this
rulemaking, includes more than just functions provided by the injured
resource for humans. When determining the necessary level of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources, trustee officials have the discretion to consider
services provided by the injured resource for another resource,
regardless of whether there is a committed human use of those services.
Finally, the Department did not intend to suggest in the July 22,
1993, Federal Register notice that trustee officials may not use
manufactured devices to assist the restoration of injured resources.
The Department simply meant that trustee officials should not replace
injured natural resources with artificial resources.
Comment: There were a number of comments about whether restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
should include reestablishing baseline services provided by the injured
resource to other resources (e.g., provision of a food source for fish
or wildlife). Some commenters supported consideration of inter-resource
services in order to ensure complete restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources. Other
commenters thought that trustee officials generally should not consider
inter-resource services. These commenters stated that requiring
restoration, rehabilitation, replacement, and/or acquisition of
equivalent inter-resource services would amount to requiring
replication of the exact natural resource that was injured. These
commenters expressed concern that there is currently no way of
accurately quantifying inter-resource service levels. Some of these
commenters suggested that inter-resource services be considered only
when they have value to humans.
Response: Section 11.71(e), which was not affected by this
rulemaking, allows trustee officials to consider inter-resource
services when quantifying an injury. Since restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources is designed to
correct an injury, trustee officials have the discretion to consider
inter-resource services when determining the necessary level of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources. As was noted in the August 1, 1986, preamble to
the original type B rule:
* * * The non-human services may be more important [than
services used by humans] in measuring changes in how well a wildlife
habitat or marsh is supporting wildlife, controlling floods,
assimilating wastes, and providing any other services that may be
important. 51 FR 27687.
Moreover, as discussed above, prohibiting trustee officials from
considering inter-resource services could violate the Ohio v. Interior
holding concerning committed use. J. Selection of a Restoration,
Rehabilitation, Replacement, and/or Acquisition Alternative
Comment: There were numerous comments on the factors for
consideration during selection of a restoration, rehabilitation,
replacement, and/or acquisition alternative. Several commenters thought
that the proposed rule would afford trustee officials the appropriate
degree of discretion by providing factors for consideration but leaving
the question of how to weigh those factors up to the trustee officials.
A number of other commenters thought that the proposed rule would
provide trustee officials with too much discretion over selection of a
restoration, rehabilitation, replacement, and/or acquisition
alternative. These commenters supported the Department's proposal to
require trustee officials to consider all of the listed factors.
However, these commenters stated that simply requiring consideration of
the factors was inadequate. These commenters stated that the Department
should provide guidance on how trustee officials should consider and
weigh the factors in order to prevent abuses of discretion. A few
commenters objected to the Department's statement that development of a
post-award Restoration Plan would curb potential abuses of discretion
by a trustee official in selecting a pre-award restoration,
rehabilitation, replacement, and/or acquisition alternative to serve as
the basis of the trustee official's claim.
Response: Section 11.82(d) lists factors for trustee officials to
consider when choosing a restoration, rehabilitation, replacement, and/
or acquisition alternative. The language of the proposed rule has been
revised to require trustee officials to consider all of the listed
factors. However, in light of the wide range of possible natural
resource damage cases, the Department believes that trustee officials
must have flexibility when selecting a restoration, rehabilitation,
replacement, and/or acquisition alternative. Therefore, the rule does
not mandate how trustee officials should weigh the listed factors.
The rule provides a number of protections against potential abuses
of discretion by trustee officials. Trustee officials are required to
document their rationale for selecting a particular alternative. This
documentation is included both in the Restoration and Compensation
Determination Plan, which is subject to public review and comment, and
in the Report of Assessment, which is reviewable in court. Finally, the
rule provides that the Restoration Plan, which describes how the
damages that are actually collected will be spent, is to be based on
the alternatives selected in the Restoration and Compensation
Determination Plan. Although the Restoration Plan is developed after
damages have been recovered, the Restoration Plan is subject to public
review and comment. Therefore, trustee officials who propose
restoration, rehabilitation, replacement, and/or acquisition
alternatives that differ from those used as a basis for damages will
have to explain the reasons for the difference.
Comment: Some commenters thought that trustee officials should be
required to choose restoration, rehabilitation, replacement, and/or
acquisition alternatives that are technically feasible.
Response: The rule lists technical feasibility as one of the
factors that trustee officials must consider when selecting a
restoration, rehabilitation, replacement, and/or acquisition
alternative. Under Sec. 11.14(qq) of the rule, an alternative is
``technically feasible'' if it involves well-known technology and has a
reasonable chance of successful completion in an acceptable period of
time. Different alternatives may possess varying degrees of
feasibility. The technical feasibility factor is designed to require an
evaluation of these varying degrees of technical feasibility rather
than to establish a strict standard of feasibility for acceptable
alternatives. Nevertheless, trustee officials should not select
alternatives that are infeasible.
Comment: A number of commenters suggested that trustee officials
should be required to choose the restoration, rehabilitation,
replacement, and/or acquisition alternative that maximized net benefits
or was most cost effective.
Response: Ohio v. Interior recognized that cost considerations,
although relevant, are not paramount under CERCLA. Therefore, the rule
does not require trustee officials to select the alternative that is
most cost effective or that minimizes costs. However, the rule does
require trustee officials to consider both cost effectiveness and the
relationship between costs and benefits when selecting a restoration,
rehabilitation, replacement, and/or acquisition alternative.
When considering the relationship between costs and benefits,
trustee officials should consider how each restoration, rehabilitation,
replacement, and/or acquisition alternative would affect not only the
injured resources but also lost interim use of those resources. Total
damages will depend on the sum of compensable value and restoration,
rehabilitation, replacement, and/or acquisition costs. Often there will
be tradeoffs between compensable value and restoration, rehabilitation,
replacement, and/or acquisition costs. For example, a fast-paced
restoration, rehabilitation, replacement, and/or acquisition
alternative may result in a lower level of interim lost use, and thus
reduce associated compensable values. However, implementation of such
an alternative may result in significantly higher restoration,
rehabilitation, replacement, and/or acquisition costs. In some cases,
there may be sufficient data to demonstrate that some restoration,
rehabilitation, replacement, and/or acquisition alternatives result in
substantially lower total damages than others.
In its January 7, 1994 notice of proposed rulemaking, NOAA
solicited comment on whether its damage assessment regulations under
OPA should require trustee officials to explain their rationale if they
select a restoration, rehabilitation, replacement, and/or acquisition
alternative that does not minimize total damages. 59 FR 1134. If NOAA
does include such a requirement in its final damage assessment
regulations, the Department will consider whether a similar requirement
should be added to the Department's type B rule during the upcoming
biennial review.
Comment: A few commenters thought that the Department should
require trustee officials to select a restoration, rehabilitation,
replacement, and/or acquisition alternative that is consistent with the
response actions taken at the site. These commenters expressed concern
that without such a requirement, State trustee officials could
circumvent section 121(f) of CERCLA, which requires States to bear the
cost of obtaining cleanup levels beyond those selected by the United
States Environmental Protection Agency (EPA).
Response: Section 11.23(f) of the rule, which was not affected by
this rulemaking, requires trustee officials to coordinate their
activities with the lead response agency. Also, Sec. 11.82(d)(4) of
this final rule requires trustee officials to consider the effects of
any actual or planned response actions when selecting a restoration,
rehabilitation, replacement, and/or acquisition alternative. The
Department encourages trustee officials to work closely with EPA, the
United States Coast Guard, and State response agencies. However, the
Department recognizes that the purpose of a response action may differ
from that of an action to restore, rehabilitate, replace, and/or
acquire the equivalent of injured resources. Therefore, the Department
does not believe that consistency with response actions should govern
the selection of a restoration, rehabilitation, replacement, and/or
acquisition alternative.
The Department does not believe that section 121(f) of CERCLA is
applicable in this context. Section 121(f) addresses whether the cost
of attaining a certain cleanup level should be borne by the Federal
Hazardous Substance Superfund or by the State; it does not address PRP
liability for natural resource damages.
Comment: Some commenters requested that trustee officials be
required to provide a detailed analysis of the factors listed in
Sec. 11.82(d).
Response: The Department believes that a trustee official's
analysis of the factors listed in Sec. 11.82(d), like all statements
required under the regulations, should be detailed enough to provide
PRPs, other trustee officials, the general public, any other interested
parties, and ultimately the courts with an adequate opportunity to
evaluate the analysis. The level of detail may vary depending on the
alternatives involved. The Department does not believe that any
revision of the rule is necessary.
Comment: One commenter requested that proposed Sec. 11.82(d)(10),
which addressed consideration of consistency with applicable Federal
and State laws and policies, be amended to include reference to tribal
laws and policies.
Response: The Department agrees with the commenter and has revised
the rule accordingly. As noted in the July 22, 1993, Federal Register
notice, the Department has also decided that consideration of
compliance with applicable Federal, State, and tribal laws should be
distinguished from consideration of consistency with relevant Federal,
State, and tribal policies. Therefore, the Department has revised the
language of proposed Sec. 11.82(d)(10) to list these two factors
separately.
Comment: A few commenters suggested that the Department prohibit
trustee officials from considering factors other than those listed.
These commenters expressed concern that in the absence of such a
prohibition, trustee officials might base their decisions on
inappropriate considerations.
Response: The Department believes that in some situations there may
be appropriate considerations in addition to the factors listed in
Sec. 11.82(d). Section 11.82(d) already provides that all factors
considered must be relevant. The Department does not believe that any
revision of the rule is necessary.
Comment: Some commenters stated that the rule should clearly
authorize trustee officials to choose a natural recovery alternative
when selecting a restoration, rehabilitation, replacement, and/or
acquisition alternative. Some commenters thought that the Department
should provide guidance on how trustee officials could maximize the
opportunities for natural recovery.
Response: The Department believes that the rule does clearly
authorize trustee officials to select a natural recovery alternative
when appropriate. In fact, Sec. 11.82(c)(2) explicitly requires trustee
officials to consider a ``No Action-Natural Recovery'' alternative.
Development of additional guidance is beyond the scope of this
rulemaking.
Comment: Some commenters thought that the rule should not
discriminate among the four components of restoration, rehabilitation,
replacement, and acquisition of equivalent resources. Other commenters
thought that the rule should not grant acquisition of land the same
status as restoration, rehabilitation, or replacement. These commenters
stated that CERCLA and Ohio v. Interior establish a clear preference
for using restoration or replacement costs, as opposed to acquisition
costs, as the measure of damages. The commenters noted that section
107(f)(1) of CERCLA does list restoration, replacement, and acquisition
of equivalent resources as legitimate uses of collected damages but
then provides that the measure of damages shall not be limited by
restoration and replacement costs. According to the commenters, these
statutory provisions indicate, and the court in Ohio v. Interior
recognized, that amounts recovered must be spent first on feasible
restoration or replacement actions and then any excess funds are to be
spent on acquisition of equivalent resources. These commenters also
stated that land acquisition does nothing to improve the condition of
the injured natural resources.
Response: In light of the wide range of possible cases, the
Department believes that the rule should provide flexibility in the
selection of a method to return an injured resource to baseline. The
term ``restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources'' was introduced to emphasize that trustee
officials may select among a wide range of methods. The Department does
not believe that the rule should establish a preference for restoration
as opposed to acquisition of equivalent resources. CERCLA explicitly
mentions use of recovered funds for restoration, rehabilitation,
replacement or acquisition of equivalent resources. The ``shall not be
limited by'' language quoted by the commenters simply provides that
trustee officials may obtain damages in excess of restoration costs.
The statutory language does not require that damages be based on
acquisition costs only if restoration is infeasible. Further, the court
in Ohio v. Interior did not establish any preference for restoration as
opposed to acquisition of equivalent resources. In fact, the court
specifically stated that its use of the term ``restoration'' was
intended as shorthand for restoration, rehabilitation, replacement, or
acquisition of the equivalent of the injured resources. 880 F.2d at
441.
Comment: Some commenters supported the Department's clarification
that the restriction on land acquisition set forth in proposed
Sec. 11.82(d)(8) would apply only to Federal trustee officials, not
State or tribal trustee officials. Other commenters thought that the
restriction should be eliminated altogether.
Response: As was noted in the August 1, 1986, preamble to the
original type B rule, the restriction on land acquisition by Federal
trustee officials was included:
* * * After extensive consultation with other Federal agencies.
The purpose of this limitation is to limit the acquisition of
private lands for Federal management under CERCLA, by eliminating
the possibility of expanding the Federal estate without
Congressional approval. 51 FR 27719.
To avoid any confusion, the Department has removed the restriction
from the list of factors that all trustee officials must consider when
selecting a restoration, rehabilitation, replacement, and/or
acquisition alternative and designated it as a separate provision.
Further revision is beyond the scope of this rulemaking.
Comment: Some commenters requested that trustee officials be
prohibited from selecting a restoration, rehabilitation, replacement,
and/or acquisition alternative that involves the purchase of
contaminated land.
Response: The Department anticipates that there may be situations
in which it is difficult to identify available land in the appropriate
geographical region that provides services identical to those provided
by the injured resources. Therefore, the Department believes it would
be inappropriate to further restrict trustee officials by requiring
them to acquire only land that is free from all contamination.
Comment: Some commenters thought that if trustee officials based
their damage claim on acquisition costs, they should be required to
demonstrate a clear link between the services lost and the services
provided by the acquired resource.
Response: The rule provides that trustee officials are to select a
restoration, rehabilitation, replacement, and/or acquisition
alternative that reestablishes baseline services. Therefore, any
alternative based on acquisition of resources would have to involve
acquiring resources that provide services equivalent to those lost as a
result of the injury.
Comment: One commenter expressed concern that proposed
Sec. 11.82(b)(1) could be read to require trustee officials to examine
restoration, rehabilitation, replacement, and/or acquisition
alternatives on a resource-by-resource basis.
Response: The Department did not intend to require trustee
officials to examine restoration, rehabilitation, replacement, and/or
acquisition alternatives on a resource-by-resource basis. To avoid any
confusion, the Department has revised the language of the proposed rule
to refer to ``resources'' rather than ``resource.''
K. Costs of Restoration, Rehabilitation, Replacement, and/or
Acquisition of Equivalent Resources
Comment: A number of commenters objected to the inclusion of
indirect costs as recoverable restoration, rehabilitation, replacement,
and/or acquisition costs. These commenters stated that indirect costs
are not recoverable in natural resource damage cases as a matter of
law. The commenters acknowledged that courts have awarded indirect
costs in response actions; however, the commenters stated that those
courts relied on the broad language of section 107(a)(4)(A) of CERCLA,
which authorizes recovery of ``all costs of removal or remedial
action.''
Some commenters cited case law for the proposition that indirect
costs are generally not recoverable. United States v. Rohm and Haas
Company, 2 F.3d 1265 (3d Cir. 1993) (U.S. v. Rohm and Haas). A few
commenters stated that recoverable indirect costs should be limited to
those actually caused by the release and objected to the reference in
proposed Sec. 11.83(b)(1)(ii) to recovery of costs of activities that
``support'' the selected restoration, rehabilitation, replacement, and/
or acquisition alternative. These commenters also stated that the
Department should clarify that the cost of policy formulation is not
recoverable.
Response: The Department believes that inclusion of indirect costs
in an assessment is consistent with both Ohio v. Interior and the
language and legislative history of CERCLA, which emphasize development
of a damage figure that will make the public whole. 880 F.2d at 445.
Section 107(f)(1) of CERCLA contains the broad language that ``[t]he
measure of damages shall not be limited by the sums which can be used
to restore or replace'' the injured resources.
The Department agrees that PRPs are only liable for those indirect
costs that are connected to a specific release or discharge. However,
the Department does not believe that revisions to the language of the
proposed rule are necessary. Furthermore, although the Department does
not think that the cost of policy formulation would generally be
recoverable, there may be some cases in which certain policy
formulation activities would not take place but for the occurrence of a
specific release or discharge. In those cases, and only in those cases,
the costs of policy formulation could be recoverable.
The Department does not believe that U.S. v. Rohm and Haas is
relevant. The court in that case held that EPA oversight of cleanup
activities conducted by PRPs did not constitute a ``removal'' action
under CERCLA, and therefore the cost of the oversight was not
recoverable. The court did not address the recoverability of indirect
costs associated with government action. In fact, the court
specifically stated that ``this case does not involve the issue of
whether indirect, overhead costs associated with government removal or
remedial activity at a particular facility are recoverable * * *.'' 2
F.3d at 1273. The indirect costs recoverable under this rule are not
oversight costs but rather costs that trustee officials will incur as
they undertake restoration, rehabilitation, replacement, and/or
acquisition.
Comment: A few commenters sought clarification of the meaning of
the following language in proposed Sec. 11.83(b)(1)(iii):
When an indirect cost rate is used * * * [s]uch amounts
determined in lieu of indirect costs shall be treated as an offset
to the total indirect costs of the selected alternative before
allocation to the remaining activities. The base upon which such
remaining costs are allocated should be adjusted accordingly.
Response: The Department acknowledges the confusion generated by
these last two sentences of proposed Sec. 11.83(b)(1)(iii) and has
deleted them.
Comment: Some commenters objected to the language of proposed
Sec. 11.83(b)(3) limiting trustee officials to cost estimating
methodologies based on accounting practices. These commenters stated
that accounting practices are generally developed to deal with past
events and that methodologies developed in other disciplines are better
suited for estimating future expenses. The commenters suggested that
trustee officials be allowed to use methodologies based on ``standard
and accepted professional practices'' or simply ``standard and accepted
estimating practices,'' including engineering practices and public
budgeting practices.
Response: The Department did not intend to limit trustee officials
to using only accounting practices. The Department has revised the
language of proposed Sec. 11.83(b)(3) to allow for the use of any
standard and accepted cost estimating practices provided that the
trustee officials can document that those practices satisfy the
criteria set forth in Sec. 11.83(a)(3).
Comment: One commenter stated that the rule should explicitly
recognize the authority of trustee officials to use combinations of
different cost estimating methodologies.
Response: The Department agrees that trustee officials should be
allowed to use combinations of different cost estimating methodologies,
so long as the different methodologies either do not double count
damages or allow any double counting to be estimated and eliminated in
the final damage calculation. The Department has revised the language
of proposed Sec. 11.83(b)(2) to make this point clear.
Comment: A few commenters thought that the proposed rule provided
inadequate guidance on selection and use of cost estimating
methodologies.
Response: The Department believes that development of additional
guidance is beyond the scope of this rulemaking.
L. Compensable Value
Comment: A few commenters thought that the proposed rule provided
inadequate guidance on selection and use of valuation methodologies.
Response: The ``Type B Technical Information Document: Techniques
to Measure Damages to Natural Resources,'' which was developed in 1987,
is available through the National Technical Information Service, 5285
Port Royal Road, Springfield, Virginia 22161, (703) 487-4650. The
Department is considering updating the document; however, such revision
is beyond the scope of this rulemaking.
Comment: Some commenters requested that proposed Sec. 11.84(h)(3)
be revised to allow State trustee officials to assess and recover
compensable value for all individuals, not just those within the State.
Response: The ``scope of analysis'' provisions contained in
Sec. 11.84(h)(3) have not been substantively changed by this
rulemaking. Virtually identical provisions were incorporated in
Sec. 11.84(i) during the August 1, 1986, rulemaking. This final rule
merely substitutes the term ``compensable value'' for the term ``use
value.'' Further clarification is beyond the scope of this rulemaking.
Comment: A few commenters questioned what was meant by the term
``secondary economic impacts,'' which would be excluded from the
definition of ``compensable value'' under proposed Sec. 11.83(c)(1).
Response: The Department believes that introducing the term
``secondary economic impacts'' into the regulations would create
unnecessary confusion. Therefore, the Department has revised the
proposed rule to eliminate the term. Nevertheless, the Department notes
that all recoverable values must be traceable to a direct loss of
services provided to the public.
M. Date of Promulgation of the Natural Resource Damage Assessment
Regulations
Comment: There were numerous comments on proposed Sec. 11.91(e)
clarifying the date of promulgation of the natural resource damage
assessment regulations for statute of limitations purposes. Several
commenters supported proposed Sec. 11.91(e). These commenters stated
that clarification of the date of promulgation was necessary and within
the Department's statutory authority and technical expertise. Other
commenters thought that clarification of a term in the statute of
limitations was a judicial matter beyond the Department's authority and
expertise.
Response: The Department believes that it has full authority to
issue Sec. 11.91(e). Section 301(c) of CERCLA authorizes the Department
to ``promulgate regulations for the assessment of damages for injury to
* * * natural resources.'' Section 113(g)(1) of CERCLA creates a
statute of limitations based on the date that those regulations are
``promulgated.'' Since Ohio v. Interior and Colorado v. Interior were
issued, there has been considerable confusion over the statute of
limitations. Nothing in the language or legislative history of CERCLA
explicitly defines ``promulgation.'' As the agency given authority to
develop procedures for assessing natural resource damages, the
Department believes it is in the best position to evaluate when
regulations establishing full procedures have been promulgated.
Issuance of Sec. 11.91(e) is designed merely to clarify an unclear
statutory term and is well within the scope of the Department's
expertise and statutory grant of authority.
Comment: Some commenters stated that the proposed clarification was
consistent with Congressional intent. These commenters noted
legislative history indicating that section 113(g)(1) was added to
CERCLA out of concern that the absence of final natural resource damage
assessment regulations had impaired the ability of trustee officials to
pursue claims. According to these commenters, trustee officials are
just as handicapped after Ohio v. Interior and Colorado v. Interior as
they were when section 113(g)(1) was passed because those cases
invalidated a crucial aspect of the regulations, namely the measure of
damages.
Other commenters stated that the proposed clarification could not
be consistent with Congressional intent because it would allow the
statute of limitations to be tolled indefinitely. These commenters
disagreed with the Department's statement in the July 22, 1993, Federal
Register notice that Ohio v. Interior and Colorado v. Interior left
trustee officials without a measure of damages. These commenters stated
that Ohio v. Interior established restoration costs as the measure of
damages.
Response: The Department believes that proposed Sec. 11.91(e) is
completely consistent with Congressional intent. Ohio v. Interior did
not overturn the regulations in their entirety; however, it did remand
an extremely critical component of the regulations, namely the measure
of damages. Although Ohio v. Interior held that restoration costs are
the preferred measure of damages, the court also acknowledged that the
Department has considerable authority and discretion to shape the
specific scope of the measure of damages. Thus, until the Department
revises the regulations, no valid measure of damages exists.
Section 11.91(e) does not allow the statute of limitations to be
tolled indefinitely, it merely ensures that trustee officials are not
barred from bringing suit before they have the benefit of complete
procedures for assessing natural resource damages. The legislative
history of the Superfund Amendments and Reauthorization Act (SARA)
indicates that section 113(g)(1) was added to CERCLA because Congress
believed that so long as trustee officials lacked procedures for
assessing natural resource damages they were handicapped in their
ability to bring suit. In the absence of a valid damage formula, the
very goal of the natural resource damage assessment regulations, namely
the derivation of a monetary damage figure, cannot be fully realized.
Comment: Some commenters stated that the proposed clarification of
the date of promulgation was incorrect as a matter of law and common
sense. The commenters cited dictionaries and case law for the
proposition that the date of promulgation is the date on which a signed
rule is first made public or is published, not when it has cleared
judicial hurdles. United States v. City of Seattle, No. C90-395WD, slip
op. (W.D. Wash. Jan. 28, 1991) (U.S. v. Seattle); American Petroleum
Institute v. Costle, 609 F.2d 20, 23-24 (D.C. Cir. 1979) (API v.
Costle); United Technologies Corp. v. Occupational Safety and Health
Administration, 836 F.2d 52, 54 (2d Cir. 1987) (UTC v. OSHA).
Response: The Department believes that the cases cited by
commenters for the proposition that ``promulgation'' occurs when a
regulation is first made public are inapposite. API v. Costle involved
the interpretation of a provision of the Clean Air Act that prohibited
the inclusion of documents in a rulemaking docket after the date of
promulgation. 609 F.2d at 22. Noting that the statutory provision was
designed to ensure adequate opportunity for public review and to
prevent post hoc rationalizations, the court held that the date of
promulgation was the date the final rule was first released to the
public as opposed to the date of publication in the Federal Register.
Id. at 23-24.
UTC v. OSHA involved the statute of limitations period for filing a
challenge to an OSHA standard. 836 F.2d at 53. The statute provided
that any challenges to a standard issued by OSHA had to be brought
within 60 days after the standard was promulgated. Id. OSHA regulations
defined ``the date of issuance'' as the time of filing in the Office of
the Federal Register but did not define ``promulgation.'' Nevertheless,
OSHA argued that the date of promulgation should also be the date of
filing with the Office of the Federal Register. The court noted that
Congress, by using two different terms, must have intended the date of
issuance to differ from the date of promulgation. Id. Therefore, the
court held that the date of promulgation was the date of publication in
the Federal Register. Id. at 54.
Neither API v. Costle nor UTC v. OSHA purport to define
``promulgation'' for all purposes. In fact, the cases reveal that the
definition of ``promulgation'' can vary, depending on Congressional
intent. The cases also do not address the specific question of the
effect of a judicial remand on the date of promulgation for statute of
limitation purposes. Further, the court in UTC v. OSHA recognized an
agency's authority to determine when its regulations had been
promulgated, stating that ``[t]he agency is certainly entitled to adopt
a definition of `promulgated', and it may well have the power to equate
`promulgated' with `issued', if it chooses to.'' Id. at 53. The problem
in that case was that the agency had not issued a regulation defining
``promulgation.''
U.S. v. Seattle involved a motion to dismiss a natural resource
damage case on statute of limitations grounds. The defendant had argued
that the statute of limitations began to run on August 1, 1986, the
date the original type B rule was published. In an unpublished opinion,
the court denied the motion to dismiss and held that the statute of
limitations did not begin to run until both type A and type B rules had
been promulgated. Slip op. at 1. Because the case had been filed within
three years of March 20, 1987, the date the original type A rule was
published, the court did not need to reach, and did not address, the
issue of the effect of Ohio v. Interior and Colorado v. Interior on the
date of promulgation.
However, in light of existing case law, the Department has decided
that it would be more appropriate to base the date of promulgation on
the date of publication of final rules complying with Ohio v. Interior
and Colorado v. Interior rather than the date of effectiveness of those
final rules. The Department has revised the rule accordingly.
Comment: A few commenters noted that section 113(a) of CERCLA
provides that any challenge to regulations issued under the statute
must be brought within 90 days of promulgation. These commenters stated
that if the natural resource damage assessment regulations had not been
promulgated, the court in Ohio v. Interior would not have had
jurisdiction.
Response: The Department does not dispute that the court in Ohio v.
Interior had jurisdiction under section 113(a) of CERCLA. However, the
Department does not believe that determination of the date of
promulgation for purposes of section 113(a) is necessarily dispositive
of the issue of the date of promulgation for purposes of section
113(g)(1).
Comment: A few commenters expressed concern that the Department has
a conflict of interest because issuance of the proposed clarification
of the date of promulgation would preserve the Department's ability to
pursue its own natural resource damage claims.
Response: The Department does not believe that it has allowed its
duties as a Federal trustee agency to prejudice the development of the
natural resource damage assessment regulations. The Department has
striven to develop regulations that are fair to not only trustee
officials and the general public but also PRPs. Moreover, the
Department notes that it is not only a trustee agency but frequently a
PRP in natural resource damage cases.
N. Judicial Review of an Assessment
Comment: There were a number of comments concerning judicial review
of assessments performed in accordance with the rule. Some commenters
supported the Department's statement in the July 22, 1993, Federal
Register notice that the rebuttable presumption attaches only to those
assessments that are performed in accordance with the entire rule.
Other commenters disagreed, stating that the different components
of the rule are not inextricably intertwined and that trustee officials
need the flexibility to decide which aspects of the rule are
appropriate for a particular assessment. These commenters stated that
the language of section 107(f) of CERCLA, which grants a rebuttable
presumption to assessments performed ``in accordance'' with the rule,
allows trustee officials to obtain a rebuttable presumption for any
portion of an assessment that is in accordance with the rule. These
commenters thought that if trustee officials assessed one component of
damages following the rule and another component without following the
rule they should still be able to obtain a rebuttable presumption for
the component that was assessed in accordance with the rule.
Response: The Department's statement that the rebuttable
presumption attaches only to those assessments performed in accordance
with the entire rule was not intended to suggest that trustee officials
would lose the rebuttable presumption if they supplemented the damage
claim assessed under the rule with additional claims assessed without
following the rule. The rule provides both an overall administrative
process for development and review of documentation as well as a range
of alternative methodologies for the actual determination and
quantification of injury and damages. In order to obtain a rebuttable
presumption, a trustee official must follow the entire administrative
process set forth in the rule. If the trustee official has followed the
administrative process, the rebuttable presumption attaches to those
components of the damage claim that were calculated through the use of
the methodologies described in the rule. However, trustee officials are
not required to use all of the listed methodologies in order to obtain
a rebuttable presumption.
For example, if trustee officials decide not to use the rule to
assess damages for injury to a particular resource, they need not
follow those portions of the rule that describe the methodologies for
determining injury to such a resource. In that case, the trustee
officials could still obtain a rebuttable presumption for damages for
injury to other resources that were calculated using methodologies
described in the rule. Similarly, if trustee officials decide not to
use the rule to assess damages for a particular element of lost use of
an injured resource, they need not follow those portions of the rule
that describe methodologies for calculating compensable value for such
an element. In that case, the trustee officials could still obtain a
rebuttable presumption for damages for other elements of lost use that
were calculated using methodologies described in the rule.
Comment: One commenter disagreed with the Department's statement
that CERCLA does not grant a rebuttable presumption to assessments
performed by tribal trustee officials. This commenter stated that when
SARA was passed, Congress intended to grant tribes the same authority
as States in the area of natural resource trustee activities. The
commenter further stated that under established case law concerning the
Federal government's fiduciary responsibility to tribes, any ambiguity
in the statute concerning tribes' right to the rebuttable presumption
must be construed in favor of the tribes.
On the other hand, a few commenters agreed with the Department's
statement that CERCLA does not grant a rebuttable presumption to tribal
assessments. However, these commenters expressed concern that the
Department's statement in the July 22, 1993, Federal Register notice
that assessments performed jointly by Federal and tribal trustee
officials or by State and tribal trustee officials would qualify for a
rebuttable presumption. These commenters thought that such an
interpretation would circumvent the language of the statute.
Response: Section 11.91(c) of the rule was revised in 1988 to
reflect the SARA amendment to CERCLA granting a rebuttable presumption
to natural resource damage assessments performed by State trustee
officials. In the preamble to that rule, the Department stated that
SARA did not extend the rebuttable presumption to assessments performed
by tribal trustee officials. 53 FR 5167. The Department went on to
state that ``Federal trustees and Indian tribes can work closely
together in assessments, and such assessments would qualify for a
rebuttable presumption.'' Id. at 5168. Further clarification of this
issue is beyond the scope of this rulemaking.
Comment: There were several comments about the applicability of the
rebuttable presumption to assessment costs. Some commenters stated that
CERCLA provides a rebuttable presumption only for the actual damage
assessment performed in accordance with this rule not for the costs of
performing the assessment. Other commenters thought that trustee
officials who comply with this rule, including the standards for
reasonable costs, should be granted a rebuttable presumption that their
damage assessment costs are recoverable.
Response: Section 11.91(c), which was not affected by this
rulemaking, provides that when trustee officials perform an assessment
in accordance with this rulemaking, the assessment receives a
rebuttable presumption. The Department believes that the determination
of whether it is reasonable to incur a particular assessment cost is an
integral component of a damage assessment. The rule contains specific
provisions to guide trustee officials in determining whether to incur a
particular assessment cost, including a definition of reasonable
assessment costs that was specifically upheld in Ohio v. Interior.
Therefore, the Department believes that trustee officials that comply
with this rule, including the standards for determining reasonable
assessment costs, should be granted a rebuttable presumption that their
assessment costs are reasonable and, thus, recoverable.
Comment: Some commenters thought that the Department should clarify
that judicial review of an assessment is limited to the data in the
administrative record. These commenters stated that, in the absence of
such a clarification, PRPs would refuse to disclose any of their data
until formal judicial discovery begins but would demand that trustee
officials make all of their data available for public review and
comment as early in the assessment process as possible. These
commenters expressed concern that such a result would put trustee
officials at a significant disadvantage in natural resource damage
litigation.
Response: Clarification of the data that will be admitted in a
natural resource damage case is beyond the scope of this rulemaking.
O. Use of Collected Damages
Comment: Some commenters stated that trustee officials should be
required to spend all collected damages on implementation of the same
restoration, rehabilitation, replacement, and/or acquisition
alternative that was selected in the Restoration and Compensation
Determination Plan as the basis for the damage claim. These commenters
thought that without such a requirement, trustee officials would have
little incentive to perform accurate assessments. There were
suggestions that trustee officials be required to notify or obtain
permission from the court or the PRPs before implementing a final
Restoration Plan that differs significantly from the Restoration and
Compensation Determination Plan.
Response: The Department does not believe that the rule should
explicitly require collected damages to be spent on implementation of
the same restoration, rehabilitation, replacement, and/or acquisition
alternative selected in the Restoration and Compensation Determination
Plan. Section 11.93(a) provides that upon award of natural resource
damages, trustee officials must prepare a Restoration Plan describing
how the awarded funds will be used. Section 11.93(a) states that the
Restoration Plan shall be based on the Restoration and Compensation
Determination Plan. The Restoration Plan is intended to be a detailed
description of the implementation of the alternative selected in the
Restoration and Compensation Determination Plan. However, the
Department recognizes that there may be unforeseen changes in the
condition of the natural resources between the time the Restoration and
Compensation Determination Plan is prepared and the time trustee
officials actually collect damages. Also, the amount of damages
ultimately collected may differ from the amount of damages claimed.
Finally, the actual cost of restoring, rehabilitating, replacing, and/
or acquiring the equivalent of the injured resources may differ from
the estimated cost. Therefore, trustee officials may need to revise the
alternative selected in the Restoration and Compensation Determination
Plan.
The Department does not believe that absence of a requirement that
trustee officials implement the same exact alternative selected in the
Restoration and Compensation Determination Plan will eliminate trustee
officials' incentive to conduct accurate assessments. The Restoration
Plan is subject to public review and comment, and trustee officials who
propose restoration, rehabilitation, replacement, and/or acquisition
alternatives that differ from those used as a basis for damages will
have to explain the reasons for the difference. The Department believes
that making the draft Restoration Plan available for public review and
comment should provide interested parties with adequate notice of
proposed changes from the Restoration and Compensation Determination
Plan.
Comment: A few commenters requested guidance on determining when
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources is complete. Some commenters suggested that
trustee officials provide PRPs with a certification when restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
is essentially completed so that PRPs will not remain liable
indefinitely.
Response: Section 11.73(a) provides that the recovery period is the
time until baseline services have been reestablished. The Department
does not believe it is necessary to require trustee officials to
provide PRPs with a certification when restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources is essentially
completed. The extent of a PRP's continuing liability after damages
have been collected depends on the terms of the judgment or settlement
agreement. Additional clarification is beyond the scope of this
rulemaking.
Comment: Some commenters stated that any portion of collected
damages that is not spent to restore, rehabilitate, replace, and/or
acquire the equivalent of the injured resources or to supply lost uses
should be returned to the PRPs. These commenters disagreed with the
Department's statement in the July 22, 1993, Federal Register notice
that such a requirement was unnecessary because there should never be
excess funds after completion of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources. These
commenters noted that because damages are based on estimated costs of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources and estimated compensable values, there will be
excess funds whenever trustee officials overestimate costs or
compensable values.
Response: The Department believes that revision of the regulations
to address the disposition of any excess damage recoveries is beyond
the scope of this rulemaking.
Comment: One commenter asked the Department to recognize the right
of co-trustees to spend collected damages on implementation of
different Restoration Plans.
Response: Nothing in the rule prohibits co-trustees from
implementing different Restoration Plans. Additional clarification of
this issue is beyond the scope of this rulemaking.
P. Miscellaneous Comments
1. Funding of Tribal Assessments
Comment: One commenter asked the Department to acknowledge that its
fiduciary responsibility to tribes extends to natural resource damage
assessments involving tribal resources. This commenter requested that
the Department develop funding mechanisms for natural resource damage
assessments involving tribal resources.
Response: Discussion of this issue is beyond the scope of this
rulemaking.
2. Quality Assurance Plans
Comment: Several commenters stated that the rule should be revised
to eliminate the requirement that trustee officials adopt quality
assurance plans that conform with EPA guidance. These commenters
thought that EPA guidance on quality assurance is poorly suited for
natural resource damage assessment work. One commenter noted that the
Department had incorrectly stated that proposed Sec. 11.31(c)(4)
contained a reference to EPA quality assurance guidance when in fact
that reference is contained in Sec. 11.31(c)(3) of the existing rule.
Response: In the July 22, 1993, Federal Register notice, the
Department inadvertently suggested that proposed Sec. 11.31(c)(4) would
require trustee officials to include in their Assessment Plans quality
assurance plans that complied with EPA guidance. Section 11.31(c)(4)
contains no reference to quality assurance plans. Section 11.31(c)(3),
which was renumbered but not substantively affected by this rulemaking,
does require that trustee officials develop a quality assurance plan
that satisfies the requirements listed in EPA guidance, but only if
that guidance is applicable. Further clarification is beyond the scope
of this rulemaking.
3. Threat of a Release or Discharge
Comment: Some commenters disagreed with the Department's statement
in the July 22, 1993, Federal Register notice that the regulations may
not be used to assess damages caused by a threat of a release or
discharge. These commenters noted that section 107(a) of CERCLA
specifically establishes liability for damages from a release or a
threat of a release. Further, these commenters noted that natural
resource damages include compensation for loss of use of a natural
resource. Therefore, these commenters thought that if a threat of a
release results in the loss of use of a natural resource, then trustee
officials should be able to assess and bring a claim for natural
resource damages.
Response: Section 11.10, which was not affected by this rulemaking,
provides that these regulations are only available for the assessment
of damages resulting from a discharge of oil or a release of a
hazardous substance. Although section 107(a) of CERCLA does refer to a
release or a threat of a release, section 107(a)(4)(C) refers to
damages for injury to, destruction of, or loss of natural resources
``resulting from such a release.'' Also, section 301(c) of CERCLA
authorizes the Department to develop regulations for assessment of
``damages for injury to, destruction of, or loss of natural resources
resulting from a release of oil or a hazardous substance.'' Therefore,
the rule may only be used when there has been an actual release or
discharge, as opposed to a threat of a release or discharge, and actual
injury to, destruction of, or loss of a natural resource, as opposed to
simply a reduction in use of a resource. Further clarification is
beyond the scope of this rulemaking.
4. Coordination With Response Activities
Comment: Some commenters thought that the rule should provide
additional guidance on coordination of natural resource damage
assessment activities with response activities. A few commenters stated
that trustee officials should be required to participate in the
remedial planning process. One commenter supported coordination of
natural resource damage assessment activities and response activities
but urged trustee officials to bear in mind the paramount need for
rapid and effective cleanup. One commenter suggested that the On-Scene
Coordinator be allowed to contact just one Federal trustee agency and
one State trustee agency and that the contacted trustee agencies be
required to notify all other trustee agencies.
Response: The August 1, 1986, preamble to the original type B rule
contains considerable discussion of the relationship between response
actions and natural resource damage assessments. 51 FR 27681, 27692-93.
Further clarification of the issue is beyond the scope of this
rulemaking.
5. Injuries Caused by Response Activities
Comment: One commenter asked the Department to clarify that State
trustee officials are not allowed to recover damages for injuries
caused or aggravated by State-ordered cleanup activities if those
injuries were reasonably avoidable. Another commenter interpreted the
rule to prohibit recovery of damages for any injuries that trustee
officials could have reasonably avoided.
Response: Section 11.15(a)(1)(ii), which was not affected by this
rulemaking, provides that PRPs are liable for any increase in injuries
that is reasonably unavoidable as a result of response actions taken or
anticipated. As was stated in the August 1, 1986, preamble to the
original type B rule,
* * * The Department believes that any response actions
undertaken by government agencies should strive to avoid additional
injury to natural resources whenever possible. Damages from such
``reasonably unavoidable'' increases in injury resulting from
response actions by governmental agencies are not excluded from
damage actions, because they are indirectly due to the discharge or
release and thus included under section 301(c) of CERCLA. 51 FR
27698.
Therefore, if government response activities cause an increase in
injuries, trustee officials can only recover damages for the increase
if it was reasonably unavoidable. Section 11.15(a)(1)(ii) deals solely
with liability for increases in injuries caused by response actions.
Section 11.14(jj), which was not affected by this rulemaking, defines
``response'' as removal or remedial actions as defined in sections
101(23) and 101(24) of CERCLA.
6. Limitations on Liability
Comment: A few commenters believed that the rule should clarify the
application of various statutory limitations on liability, including
the ceilings set forth in section 107(c) of CERCLA and the provision in
section 107(f)(1) that excludes natural resource damages if those
damages and the release that caused those damages occurred wholly
before the enactment of CERCLA.
Response: The Department notes that Secs. 11.15(b) and 11.24(b)(1),
which were not affected by this rulemaking, already incorporate the
ceilings on damages set forth in section 107(c) of CERCLA and the
limitation on damages set forth in section 107(f)(1) of CERCLA. Any
further clarification of these provisions is beyond the scope of this
rulemaking.
7. Timing of the Restoration and Compensation Determination Plan
Comment: Some commenters thought that the information needed to
determine the required level of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources would not be
available at the time that the Assessment Plan is made available for
public comment and review; therefore, the Restoration and Compensation
Determination Plan should not be prepared until after Injury
Determination and Quantification have been completed. Other commenters
expressed concern that allowing preparation of the Restoration and
Compensation Determination Plan to be delayed would lead trustee
officials to perform unnecessary and unfocused assessment work during
Injury Determination and Quantification. Therefore, the commenters
suggested that trustee officials be required to use their best efforts
to prepare the Restoration and Compensation Determination Plan at the
same time as the rest of the Assessment Plan.
Response: The Department believes that early preparation of the
Restoration and Compensation Determination Plan is advisable to ensure
that the costs of assessments are reasonable. The definition of
``reasonable cost,'' which was not affected by this rulemaking,
includes a requirement that Injury Determination, Quantification, and
Damage Determination bear a well defined relationship to each other.
The Assessment Plan, which includes the Restoration and Compensation
Determination Plan, is designed to coordinate Injury Determination,
Quantification, and Damage Determination. Therefore, the Restoration
and Compensation Determination Plan should be prepared as early as
possible. In most cases, trustee officials should be able to develop an
initial Restoration and Compensation Determination Plan based on
estimates of the extent and nature of the injuries and then make
revisions as needed. Section 11.32(e)(1) of the rule, which was not
affected by this rulemaking, authorizes trustee officials to modify any
part of the Assessment Plan at any stage of the assessment as new
information becomes available.
However, the Department recognizes that selection of a restoration,
rehabilitation, replacement, and/or acquisition alternative depends in
part upon the extent and nature of the injuries, which will not be
fully known at the outset of an assessment. Therefore, there may be
cases where even a preliminary attempt to evaluate restoration,
rehabilitation, replacement, and/or acquisition alternatives would be
meaningless unless Injury Determination or Quantification had begun. In
these cases, premature preparation of the Restoration and Compensation
Determination Plan could temporarily misdirect Injury Determination and
Quantification. Therefore, the rule provides that in those cases where
existing data are insufficient to develop a Restoration and
Compensation Determination Plan at the time that the rest of the
Assessment Plan is prepared, the Restoration and Compensation
Determination Plan may be developed later. Nevertheless, the
Restoration and Compensation Determination Plan must always be
developed before completion of Quantification in order to ensure that
Quantification is correlated with Damage Determination.
The Department believes that it is unnecessary to add a requirement
that trustee officials use their ``best efforts'' to prepare the
Restoration and Compensation Determination Plan along with the rest of
the Assessment Plan. Nevertheless, the Department emphasizes that
trustee officials should only delay development of the Restoration and
Compensation Determination Plan when existing data are insufficient to
develop even a rough estimate of the extent of the injuries. Further,
if trustee officials do delay development of the Restoration and
Compensation Determination Plan, they should complete the Plan as soon
as they obtain sufficient information.
National Environmental Policy Act, Regulatory Flexibility Act,
Paperwork Reduction Act, and Executive Orders 12866, 12630, 12778, and
12612
The Department has determined that this rule does not constitute a
major Federal action significantly affecting the quality of the human
environment. Therefore, no further analysis pursuant to section
102(2)(C) of the National Environmental Policy Act (43 U.S.C.
4332(2)(C)) has been prepared.
The Department certifies that this rule will not have a significant
economic effect on a substantial number of small entities under the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The rule provides
technical procedural guidance for the assessment of damages to natural
resources. It does not directly impose any additional cost. As the rule
applies to natural resource trustees, it is not expected to have an
effect on a substantial number of small entities.
It has been determined that this rule does not contain information
collection requirements that require approval by the Office of
Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501
et seq.).
This final rule has been reviewed under Executive Order 12866 and
has been determined to constitute a significant regulatory action.
However, because of the difficulty of evaluating the effects of
alternatives to this rule, the Office of Information and Regulatory
Affairs within the Office of Management and Budget has waived
preparation of the assessments described in sections 6(a)(3)(B) and
6(a)(3)(C) of Executive Order 12866 for the final rule.
It has been determined that this rule does not have takings
implications under Executive Order 12630. The Department has certified
to the Office of Management and Budget that this rule meets the
applicable standards provided in sections 2(a) and 2(b)(2) of Executive
Order 12778. It has been determined that this rule does not have
federalism implications under Executive Order 12612.
List of Subjects in 43 CFR Part 11
Continental shelf, Environmental protection, Fish, Forests and
forest products, Grazing land, Indian lands, Hazardous substances,
Mineral resources, National forests, National parks, Natural resources,
Oil pollution, Public lands, Wildlife, Wildlife refuges.
For the reasons set out in the preamble, title 43, subtitle A of
the Code of Federal Regulations is amended as follows:
PART 11--NATURAL RESOURCE DAMAGE ASSESSMENTS
1. The authority citation for part 11 continues to read as follows:
Authority: 42 U.S.C. 9651(c), as amended.
Subpart A--Introduction
2. Section 11.13 is amended by revising paragraph (e)(3) to read as
follows:
Sec. 11.13 Overview.
* * * * *
(e) * * *
(3) Damage Determination phase. The purpose of this phase is to
establish the appropriate compensation expressed as a dollar amount for
the injuries established in the Injury Determination phase and measured
in the Quantification phase. The sections of subpart E of this part
comprising the Damage Determination phase include guidance on
acceptable cost estimating and valuation methodologies for determining
compensation based on the costs of restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources, plus, at the
discretion of the authorized official, compensable value, as defined in
Sec. 11.83(c) of this part.
* * * * *
3. Section 11.14 is amended by revising paragraph (qq) to read as
follows:
Sec. 11.14 Definitions.
* * * * *
(qq) Technical feasibility or technically feasible means that the
technology and management skills necessary to implement an Assessment
Plan or Restoration and Compensation Determination Plan are well known
and that each element of the plan has a reasonable chance of successful
completion in an acceptable period of time.
* * * * *
4. Section 11.15 is amended by revising paragraph (a)(3)(ii) to
read as follows:
Sec. 11.15 Actions against the responsible party for damages.
(a) * * *
(3) * * *
(ii) Administrative costs and expenses necessary for, and
incidental to, the assessment, assessment planning, and restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
planning, and any restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources undertaken; and
* * * * *
Subpart C--Assessment Plan Phase
5. Section 11.30 is amended by revising paragraph (c)(1)(v) to read
as follows:
Sec. 11.30 Assessment Plan--general.
* * * * *
(c) * * *
(1) * * *
(v) Preliminary estimate of damages costs; and
* * * * *
6. Section 11.31 is amended by revising paragraph (a)(2), removing
paragraph (c)(2), removing the word ``and'' at the end of paragraph
(c)(3), replacing the period at the end of paragraph (c)(4) with the
words ``; and'', redesignating paragraphs (c)(3) and (c)(4) as
paragraphs (c)(2) and (c)(3) respectively, and adding a new paragraph
(c)(4) to read as follows:
Sec. 11.31 Assessment Plan--content.
(a) * * *
(2) The Assessment Plan shall be of sufficient detail to serve as a
means of evaluating whether the approach used for assessing the damage
is likely to be cost-effective and meets the definition of reasonable
cost, as those terms are used in this part. The Assessment Plan shall
include descriptions of the natural resources and the geographical
areas involved. The Assessment Plan shall also include a statement of
the authority for asserting trusteeship, or co-trusteeship, for those
natural resources considered within the Assessment Plan. The authorized
official's statement of the authority for asserting trusteeship shall
not have the force and effect of a rebuttable presumption under
Sec. 11.91(c) of this part. In addition, for type B assessments, the
Assessment Plan shall include the sampling locations within those
geographical areas, sample and survey design, numbers and types of
samples to be collected, analyses to be performed, preliminary
determination of the recovery period, and other such information
required to perform the selected methodologies.
* * * * *
(c) * * *
(4) The Restoration and Compensation Determination Plan developed
in accordance with the guidance in Sec. 11.81 of this part. If existing
data are not sufficient to develop the Restoration and Compensation
Determination Plan as part of the Assessment Plan, the Restoration and
Compensation Determination Plan may be developed later, at any time
before the completion of the Injury Determination or Quantification
phases. If the Restoration and Compensation Determination Plan is
published separately, the public review and comment will be conducted
pursuant to Sec. 11.81(d) of this part.
7. Section 11.32 is amended by revising paragraphs (a)(2)(iii)(A)
and (f)(2), and by removing paragraph (f)(3) to read as follows:
Sec. 11.32 Assessment Plan--development.
(a) Pre-development requirements. * * *
(2) * * *
(iii)(A) The authorized official shall send a Notice of Intent to
Perform an Assessment to all identified potentially responsible
parties. The Notice shall invite the participation of the potentially
responsible party, or, if several parties are involved and if agreed to
by the lead authorized official, a representative or representatives
designated by the parties, in the development of the type and scope of
the assessment and in the performance of the assessment. The Notice
shall briefly describe, to the extent known, the site, vessel, or
facility involved, the discharge of oil or release of hazardous
substance of concern to the authorized official, and the resources
potentially at risk. The Notice shall also contain a statement of
authority for asserting trusteeship, or co-trusteeship, over those
natural resources identified as potentially at risk.
* * * * *
(f) Plan review. * * *
(2) The purpose of this review is to ensure that the selection of
methodologies for the Quantification and Damage Determination phases is
consistent with the results of the Injury Determination phase, and that
the use of such methodologies remains consistent with the requirements
of reasonable cost, as that term is used in this part.
8. Section 11.35 is revised to read as follows:
Sec. 11.35 Assessment Plan--preliminary estimate of damages.
(a) Requirement. When performing a type B assessment pursuant to
the requirements of subpart E of this part, the authorized official
shall develop a preliminary estimate of: the anticipated costs of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources for the injured natural resources; and the
compensable value, as defined in Sec. 11.83(c) of this part, of the
injured natural resources, if the authorized official intends to
include compensable value in the damage claim. This preliminary
estimate is referred to as the preliminary estimate of damages. The
authorized official shall use the guidance provided in this section, to
the extent possible, to develop the preliminary estimate of damages.
(b) Purpose. The purpose of the preliminary estimate of damages is
for reference in the scoping of the Assessment Plan to ensure that the
choice of the scientific, cost estimating, and valuation methodologies
expected to be used in the damage assessment fulfills the requirements
of reasonable cost, as that term is used in this part. The authorized
official will also use the preliminary estimate of damages in the
review of the Assessment Plan, as required in Sec. 11.32(f) of this
part, to ensure the requirements of reasonable cost are still met.
(c) Steps. The preliminary estimate of damages should include
consideration of the ability of the resources to recover naturally and,
if relevant, the compensable value through the recovery period with and
without possible alternative actions. The authorized official shall
consider the following factors, to the extent possible, in making the
preliminary estimate of damages:
(1) The preliminary estimate of costs of restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
should include consideration of a range of possible alternative actions
that would accomplish the restoration, rehabilitation, replacement,
and/or acquisition of the equivalent of the injured natural resources.
(i) The preliminary estimate of costs should take into account the
effects, or anticipated effects, of any response actions.
(ii) The preliminary estimate of costs should represent the
expected present value of anticipated costs, expressed in constant
dollars, and should include direct and indirect costs, and include the
timing of those costs. The provisions detailed in Secs. 11.80-11.84 of
this part are the basis for the development of the estimate.
(iii) The discount rate to be used in developing the preliminary
estimate of costs shall be that determined in accordance with the
guidance in Sec. 11.84(e) of this part.
(2) The preliminary estimate of compensable value should be
consistent with the range of possible alternatives for restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
being considered.
(i) The preliminary estimate of compensable value should represent
the expected present value of the anticipated compensable value,
expressed in constant dollars, accrued through the period for the
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources to baseline conditions, i.e., between the
occurrence of the discharge or release and the completion of the
restoration, rehabilitation, replacement, and/or acquisition of the
equivalent of the injured resources and their services. The estimate
should use the same base year as the preliminary estimate of costs of
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources. The provisions detailed in Secs. 11.80-11.84 of
this part are the basis for the development of this estimate.
(ii) The preliminary estimate of compensable value should take into
account the effects, or anticipated effects, of any response actions.
(iii) The discount rate to be used in developing the preliminary
estimate of compensable value shall be that determined in accordance
with the guidance in Sec. 11.84(e) of this part.
(d) Content and timing. (1) In making the preliminary estimate of
damages, the authorized official should rely upon existing data and
studies. The authorized official should not undertake significant new
data collection or perform significant modeling efforts at this stage
of the assessment planning phase.
(2) Where possible, the authorized official should make the
preliminary estimate of damages before the completion of the Assessment
Plan as provided for in Sec. 11.31 of this part. If there is not
sufficient existing data to make the preliminary estimate of damages at
the same time as the assessment planning phase, this analysis may be
completed later, at the end of the Injury Determination phase of the
assessment, at the time of the Assessment Plan review.
(3) The authorized official is not required to disclose the
preliminary estimate before the conclusion of the assessment. At the
conclusion of the assessment, the preliminary estimate of damages,
along with its assumptions and methodology, shall be included in the
Report of the Assessment as provided for in Sec. 11.91 of this part.
(e) Review. The authorized official shall review, and revise as
appropriate, the preliminary estimate of damages at the end of the
Injury Determination and Quantification phases. If there is any
significant modification of the preliminary estimate of damages, the
authorized official shall document it in the Report of the Assessment.
Subpart E--Type B Assessments
9. Section 11.60 is amended by revising paragraphs (d)(1) (iii) and
(iv) to read as follows:
Sec. 11.60 Type B assessments--general.
* * * * *
(d) Type B assessment costs. (1) * * *
(iii) Restoration and Compensation Determination Plan development
costs including:
(A) Development of alternatives;
(B) Evaluation of alternatives;
(C) Potentially responsible party, agency, and public reviews;
(D) Other such costs for activities authorized by Sec. 11.81 of
this part;
(iv) Cost estimating and valuation methodology calculation costs;
and
* * * * *
10. Section 11.71 is amended by revising paragraphs (a)(2) and
(l)(4)(ii) to read as follows:
Sec. 11.71 Quantification phase--service reduction quantification.
(a) * * *
(2) This determination of the reduction in services will be used in
the Damage Determination phase of the assessment.
* * * * *
(l) Biological resources. * * *
(4) * * *
(ii) Provide data that will be useful in planning efforts for
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources, and in later measuring the success of those
efforts, and, where relevant, will allow calculation of compensable
value; and
* * * * *
11. Section 11.72 is amended by revising paragraph (b)(4) to read
as follows:
Sec. 11.72 Quantification phase--baseline services determination.
* * * * *
(b) * * *
(4) Baseline data collection shall be restricted to those data
necessary for conducting the assessment at a reasonable cost. In
particular, data collected should focus on parameters that are directly
related to the injuries quantified in Sec. 11.71 of this part and to
data appropriate and necessary for the Damage Determination phase.
* * * * *
12. Section 11.73 is amended by revising paragraph (a) to read as
follows:
Sec. 11.73 Quantification phase--resource recoverability analysis.
(a) Requirement. The time needed for the injured resources to
recover to the state that the authorized official determines services
are restored, rehabilitated, replaced, and/or the equivalent have been
acquired to baseline levels shall be estimated. The time estimated for
recovery or any lesser period of time as determined in the Assessment
Plan shall be used as the recovery period for purposes of Sec. 11.35
and the Damage Determination phase, Secs. 11.80 through 11.84, of this
part.
(1) In all cases, the amount of time needed for recovery if no
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources efforts are undertaken beyond response actions
performed or anticipated shall be estimated. This time period shall be
used as the ``No Action-Natural Recovery'' period for purposes of
Sec. 11.82 and Sec. 11.84(g)(2)(ii) of this part.
(2) The estimated time for recovery shall be included in possible
alternatives for restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources, as developed in Sec. 11.82 of this
part, and the data and process by which these recovery times were
estimated shall be documented.
* * * * *
13. Section 11.80 is revised to read as follows:
Sec. 11.80 Damage Determination phase--general.
(a) Requirement. (1) The authorized official shall make his damage
determination by estimating the monetary damages resulting from the
discharge of oil or release of a hazardous substance based upon the
information provided in the Quantification phase and the guidance
provided in this Damage Determination phase.
(2) The Damage Determination phase consists of Sec. 11.80--general;
Sec. 11.81--Restoration and Compensation Determination Plan;
Sec. 11.82--alternatives for restoration, rehabilitation, replacement,
and/or acquisition of equivalent resources; Sec. 11.83--cost estimating
and valuation methodologies; and Sec. 11.84--implementation guidance,
of this part.
(b) Purpose. The purpose of the Damage Determination phase is to
establish the amount of money to be sought in compensation for injuries
to natural resources resulting from a discharge of oil or release of a
hazardous substance. The measure of damages is the cost of restoration,
rehabilitation, replacement, and/or acquisition of the equivalent of
the injured natural resources and the services those resources provide.
Damages may also include, at the discretion of the authorized official,
the compensable value of all or a portion of the services lost to the
public for the time period from the discharge or release until the
attainment of the restoration, rehabilitation, replacement, and/or
acquisition of equivalent of the resources and their services to
baseline.
(c) Steps in the Damage Determination phase. The authorized
official shall develop a Restoration and Compensation Determination
Plan, described in Sec. 11.81 of this part. To prepare this Restoration
and Compensation Determination Plan, the authorized official shall
develop a reasonable number of possible alternatives for restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
and select, pursuant to the guidance of Sec. 11.82 of this part, the
most appropriate of those alternatives; and identify the cost
estimating and valuation methodologies, described in Sec. 11.83 of this
part, that will be used to calculate damages. The guidance provided in
Sec. 11.84 of this part shall be followed in implementing the cost
estimating and valuation methodologies. After public review of the
Restoration and Compensation Determination Plan, the authorized
official shall implement the Restoration and Compensation Determination
Plan.
(d) Completion of the Damage Determination phase. Upon completion
of the Damage Determination phase, the type B assessment is completed.
The results of the Damage Determination phase shall be documented in
the Report of Assessment described in Sec. 11.90 of this part.
14. Section 11.81 is revised to read as follows:
Sec. 11.81 Damage Determination phase--Restoration and Compensation
Determination Plan.
(a) Requirement. (1) The authorized official shall develop a
Restoration and Compensation Determination Plan that will list a
reasonable number of possible alternatives for restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
and the related services lost to the public associated with each;
select one of the alternatives and the actions required to implement
that alternative; give the rationale for selecting that alternative;
and identify the methodologies that will be used to determine the costs
of the selected alternative and, at the discretion of the authorized
official, the compensable value of the services lost to the public
associated with the selected alternative.
(2) The Restoration and Compensation Determination Plan shall be of
sufficient detail to evaluate the possible alternatives for the purpose
of selecting the appropriate alternative to use in determining the cost
of restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources for the injured natural resources and the services
those resources provided, and, where relevant, the compensable value of
the services lost to the public through the completion of the
restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources and their services to the baseline.
(b) The authorized official shall use the guidance in Secs. 11.82,
11.83, and 11.84 of this part to develop the Restoration and
Compensation Determination Plan.
(c) The authorized official shall list the methodologies he expects
to use to determine the costs of all actions considered within the
selected alternative and, where relevant, the compensable value of the
lost services through the recovery period associated with the selected
alternative. The methodologies to use in determining costs and
compensable value are described in Sec. 11.83 of this part.
(d) (1) The Restoration and Compensation Determination Plan shall
be part of the Assessment Plan developed in subpart B of this part. If
existing data are not sufficient to develop the Restoration and
Compensation Determination Plan at the time that the overall Assessment
Plan is made available for public review and comment, the Restoration
and Compensation Determination Plan may be developed later, after the
completion of the Injury Determination or Quantification phases.
(2) If the Restoration and Compensation Determination Plan is
prepared later than the Assessment Plan, it shall be made available
separately for public review by any identified potentially responsible
party, other natural resource trustees, other affected Federal or State
agencies or Indian tribes, and any other interested members of the
public for a period of no less than 30 calendar days. Reasonable
extensions may be granted as appropriate.
(3) Comments received from any identified potentially responsible
party, other natural resource trustees, other affected Federal or State
agencies or Indian tribes, or any other interested members of the
public, together with responses to those comments, shall be included as
part of the Report of Assessment, described in Sec. 11.90 of this part.
(4) Appropriate public review of the plan must be completed before
the authorized official performs the methodologies listed in the
Restoration and Compensation Determination Plan.
(e) The Restoration and Compensation Determination Plan may be
expanded to incorporate requirements from procedures required under
other portions of CERCLA or the CWA or from other Federal, State, or
tribal laws applicable to restoration, rehabilitation, replacement,
and/or acquisition of the equivalent of the injured resources or may be
combined with other plans for related purposes, so long as the
requirements of this section are fulfilled.
15. Section 11.82 is revised to read as follows:
Sec. 11.82 Damage Determination phase--alternatives for restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources.
(a) Requirement. The authorized official shall develop a reasonable
number of possible alternatives for the restoration, rehabilitation,
replacement, and/or acquisition of the equivalent of the injured
natural resources and the services those resources provide. For each
possible alternative developed, the authorized official will identify
an action, or set of actions, to be taken singly or in combination by
the trustee agency to achieve the restoration, rehabilitation,
replacement, and/or acquisition of equivalent natural resources and the
services those resources provide to the baseline. The authorized
official shall then select from among the possible alternatives the
alternative that he determines to be the most appropriate based on the
guidance provided in this section.
(b) Steps. (1) The authorized official shall develop a reasonable
number of possible alternatives that would restore, rehabilitate,
replace, and/or acquire the equivalent of the injured resources. Each
of the possible alternatives may, at the discretion of the authorized
official, consist of actions, singly or in combination, that would
achieve those purposes.
(i) Restoration or rehabilitation actions are those actions
undertaken to return injured resources to their baseline condition, as
measured in terms of the physical, chemical, or biological properties
that the injured resources would have exhibited or the services that
would have been provided by those resources had the discharge of oil or
release of the hazardous substance under investigation not occurred.
Such actions would be in addition to response actions completed or
anticipated pursuant to the National Contingency Plan (NCP).
(ii) Replacement or acquisition of the equivalent means the
substitution for injured resources with resources that provide the same
or substantially similar services, when such substitutions are in
addition to any substitutions made or anticipated as part of response
actions and when such substitutions exceed the level of response
actions determined appropriate to the site pursuant to the NCP.
(iii) Possible alternatives are limited to those actions that
restore, rehabilitate, replace, and/or acquire the equivalent of the
injured resources and services to no more than their baseline, that is,
the condition without a discharge or release as determined in
Sec. 11.72 of this part.
(2) Services provided by the resources. (i) In developing each of
the possible alternatives, the authorized official shall list the
proposed actions that would restore, rehabilitate, replace, and/or
acquire the equivalent of the services provided by the injured natural
resources that have been lost, and the period of time over which these
services would continue to be lost.
(ii) The authorized official shall identify services previously
provided by the resources in their baseline condition in accordance
with Sec. 11.72 of this part and compare those services with services
now provided by the injured resources, that is, the with-a-discharge-
or-release condition. All estimates of the with-a-discharge-or-release
condition shall incorporate consideration of the ability of the
resources to recover as determined in Sec. 11.73 of this part.
(c) Range of possible alternatives. (1) The possible alternatives
considered by the authorized official that return the injured resources
and their lost services to baseline level could range from: Intensive
action on the part of the authorized official to return the various
resources and services provided by those resources to baseline
conditions as quickly as possible; to natural recovery with minimal
management actions. Possible alternatives within this range could
reflect varying rates of recovery, combination of management actions,
and needs for resource replacements or acquisitions.
(2) An alternative considering natural recovery with minimal
management actions, based upon the ``No Action-Natural Recovery''
determination made in Sec. 11.73(a)(1) of this part, shall be one of
the possible alternatives considered.
(d) Factors to consider when selecting the alternative to pursue.
When selecting the alternative to pursue, the authorized official shall
evaluate each of the possible alternatives based on all relevant
considerations, including the following factors:
(1) Technical feasibility, as that term is used in this part.
(2) The relationship of the expected costs of the proposed actions
to the expected benefits from the restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources.
(3) Cost-effectiveness, as that term is used in this part.
(4) The results of any actual or planned response actions.
(5) Potential for additional injury resulting from the proposed
actions, including long-term and indirect impacts, to the injured
resources or other resources.
(6) The natural recovery period determined in Sec. 11.73(a)(1) of
this part.
(7) Ability of the resources to recover with or without alternative
actions.
(8) Potential effects of the action on human health and safety.
(9) Consistency with relevant Federal, State, and tribal policies.
(10) Compliance with applicable Federal, State, and tribal laws.
(e) A Federal authorized official shall not select an alternative
that requires acquisition of land for Federal management unless the
Federal authorized official determines that restoration,
rehabilitation, and/or other replacement of the injured resources is
not possible.
16. Section 11.83 is amended by revising paragraph (a), removing
paragraph (c), adding new paragraphs (c)(1) introductory text,
(c)(1)(i), (c)(1)(ii), (c)(2) introductory text, (c)(2)(i) through
(c)(2)(vi), and (c)(3), redesignating paragraph (b)(2) as paragraph
(c)(1)(iii), revising paragraph (b), redesignating paragraphs (d)(5)(i)
and (d)(5)(ii) as paragraphs (c)(2)(vii)(A) and (c)(2)(vii)(B)
respectively, adding a new paragraph (c)(2)(vii) heading, adding a
sentence to newly designated (c)(2)(vii)(A), and removing paragraph (d)
to read as follows:
Sec. 11.83 Damage Determination phase--cost estimating and valuation
methodologies.
(a) General. (1) This section contains guidance and methodologies
for determining: The costs of the selected alternative for restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources; and the compensable value of the services lost to the public
through the completion of the restoration, rehabilitation, replacement,
and/or acquisition of the equivalent of the injured resources and their
services to baseline.
(2)(i) The authorized official shall select among the cost
estimating and valuation methodologies set forth in this section, or
methodologies that meet the acceptance criterion of either paragraph
(b)(3) or (c)(3) of this section.
(ii) The authorized official shall define the objectives to be
achieved by the application of the methodologies.
(iii) The authorized official shall follow the guidance provided in
this section for choosing among the methodologies that will be used in
the Damage Determination phase.
(iv) The authorized official shall describe his selection of
methodologies and objectives in the Restoration and Compensation
Determination Plan.
(3) The authorized official shall determine that the following
criteria have been met when choosing among the cost estimating and
valuation methodologies. The authorized official shall document this
determination in the Report of the Assessment. Only those methodologies
shall be chosen:
(i) That are feasible and reliable for a particular incident and
type of damage to be measured.
(ii) That can be performed at a reasonable cost, as that term is
used in this part.
(iii) That avoid double counting or that allow any double counting
to be estimated and eliminated in the final damage calculation.
(iv) That are cost-effective, as that term is used in this part.
(b) Costs of restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources. (1) Costs for restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
are the amount of money determined by the authorized official as
necessary to complete all actions identified in the selected
alternative for restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources, as selected in the Restoration and
Compensation Determination Plan of Sec. 11.81 of this part. Such costs
shall include direct and indirect costs, consistent with the provisions
of this section.
(i) Direct costs are those that are identified by the authorized
official as attributed to the selected alternative. Direct costs are
those charged directly to the conduct of the selected alternative
including, but not limited to, the compensation of employees for the
time and effort devoted to the completion of the selected alternative;
cost of materials acquired, consumed, or expended specifically for the
purpose of the action; equipment and other capital expenditures; and
other items of expense identified by the authorized official that are
expected to be incurred in the performance of the selected alternative.
(ii) Indirect costs are costs of activities or items that support
the selected alternative, but that cannot practically be directly
accounted for as costs of the selected alternative. The simplest
example of indirect costs is traditional overhead, e.g., a portion of
the lease costs of the buildings that contain the offices of trustee
employees involved in work on the selected alternative may, under some
circumstances, be considered as an indirect cost. In referring to costs
that cannot practically be directly accounted for, this subpart means
to include costs that are not readily assignable to the selected
alternative without a level of effort disproportionate to the results
achieved.
(iii) An indirect cost rate for overhead costs may, at the
discretion of the authorized official, be applied instead of
calculating indirect costs where the benefits derived from the
estimation of indirect costs do not outweigh the costs of the indirect
cost estimation. When an indirect cost rate is used, the authorized
official shall document the assumptions from which that rate has been
derived.
(2) Cost estimating methodologies. The authorized official may
choose among the cost estimating methodologies listed in this section
or may choose other methodologies that meet the acceptance criterion in
paragraph (b)(3) of this section. Nothing in this section precludes the
use of a combination of cost estimating methodologies so long as the
authorized official does not double count or uses techniques that allow
any double counting to be estimated and eliminated in the final damage
calculation.
(i) Comparison methodology. This methodology may be used for unique
or difficult design and estimating conditions. This methodology
requires the construction of a simple design for which an estimate can
be found and applied to the unique or difficult design.
(ii) Unit methodology. This methodology derives an estimate based
on the cost per unit of a particular item. Many other names exist for
describing the same basic approach, such as order of magnitude, lump
sum, module estimating, flat rates, and involve various refinements.
Data used by this methodology may be collected from technical
literature or previous cost expenditures.
(iii) Probability methodologies. Under these methodologies, the
cost estimate represents an ``average'' value. These methodologies
require information which is called certain, or deterministic, to
derive the expected value of the cost estimate. Expected value
estimates and range estimates represent two types of probability
methodologies that may be used.
(iv) Factor methodology. This methodology derives a cost estimate
by summing the product of several items or activities. Other terms such
as ratio and percentage methodologies describe the same basic approach.
(v) Standard time data methodology. This methodology provides for a
cost estimate for labor. Standard time data are a catalogue of standard
tasks typically undertaken in performing a given type of work.
(vi) Cost- and time-estimating relationships (CERs and TERs). CERs
and TERs are statistical regression models that mathematically describe
the cost of an item or activity as a function of one or more
independent variables. The regression models provide statistical
relationships between cost or time and physical or performance
characteristics of past designs.
(3) Other cost estimating methodologies. Other cost estimating
methodologies that are based upon standard and accepted cost estimating
practices and are cost-effective are acceptable methodologies to
determine the costs of restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources under this part.
(c) Compensable value. (1) Compensable value is the amount of money
required to compensate the public for the loss in services provided by
the injured resources between the time of the discharge or release and
the time the resources and the services those resources provided are
fully returned to their baseline conditions. The compensable value
includes the value of lost public use of the services provided by the
injured resources, plus lost nonuse values such as existence and
bequest values. Compensable value is measured by changes in consumer
surplus, economic rent, and any fees or other payments collectable by a
Federal or State agency or an Indian tribe for a private party's use of
the natural resources; and any economic rent accruing to a private
party because the Federal or State agency or Indian tribe does not
charge a fee or price for the use of the resources.
(i) Use value is the value of the resources to the public
attributable to the direct use of the services provided by the natural
resources.
(ii) Nonuse value is the difference between compensable value and
use value, as those terms are used in this section.
* * * * *
(2) Valuation methodologies. The authorized official may choose
among the valuation methodologies listed in this section to estimate
willingness to pay (WTP) or may choose other methodologies provided
that the methodology can satisfy the acceptance criterion in paragraph
(c)(3) of this section. Nothing in this section precludes the use of a
combination of valuation methodologies so long as the authorized
official does not double count or uses techniques that allow any double
counting to be estimated and eliminated in the final damage
calculation.
(i) Market price methodology. This methodology may be used if the
natural resources are traded in the market. In using this methodology,
the authorized official should make a determination as to whether the
market for the resources is reasonably competitive. If the authorized
official determines that the market for the resources, or the services
provided by the resources, is reasonably competitive, the diminution in
the market price of the injured resources, or the lost services, may be
used to determine the compensable value of the injured resources.
(ii) Appraisal methodology. Where sufficient information exists,
the appraisal methodology may be used. In using this methodology,
compensable value should be measured, to the extent possible, in
accordance with the applicable sections of the ``Uniform Appraisal
Standards for Federal Land Acquisition'' (Uniform Appraisal Standards),
Interagency Land Acquisition Conference, Washington, DC, 1973
(incorporated by reference, see Sec. 11.18). The measure of compensable
value under this appraisal methodology will be the difference between
the with- and without-injury appraisal value determined by the
comparable sales approach as described in the Uniform Appraisal
Standards.
(iii) Factor income methodology. If the injured resources are
inputs to a production process, which has as an output a product with a
well-defined market price, the factor income methodology may be used.
This methodology may be used to determine the economic rent associated
with the use of resources in the production process. This methodology
is sometimes referred to as the ``reverse value added'' methodology.
The factor income methodology may be used to measure the in-place value
of the resources.
(iv) Travel cost methodology. The travel cost methodology may be
used to determine a value for the use of a specific area. An
individual's incremental travel costs to an area are used as a proxy
for the price of the services of that area. Compensable value of the
area to the traveler is the difference between the value of the area
with and without a discharge or release. When regional travel cost
models exist, they may be used if appropriate.
(v) Hedonic pricing methodology. The hedonic pricing methodology
may be used to determine the value of nonmarketed resources by an
analysis of private market choices. The demand for nonmarketed natural
resources is thereby estimated indirectly by an analysis of commodities
that are traded in a market.
(vi) Unit value methodology. Unit values are preassigned dollar
values for various types of nonmarketed recreational or other
experiences by the public. Where feasible, unit values in the region of
the affected resources and unit values that closely resemble the
recreational or other experience lost with the affected resources may
be used.
(vii) Contingent valuation methodology--(A) * * * This methodology
may be used to determine lost use values of injured natural resources.
* * * * *
(3) Other valuation methodologies. Other valuation methodologies
that measure compensable value in accordance with the public's WTP, in
a cost-effective manner, are acceptable methodologies to determine
compensable value under this part.
17. Section 11.84 is amended by revising paragraphs (a), (b)(1),
(d)(2), (f), and (g) heading, (g)(1), (g)(2) introductory text, (g)(2)
(i), (ii), and (iii); removing paragraph (h); and redesignating (i) as
new paragraph (h) and revising it to read as follows:
Sec. 11.84 Damage Determination phase--implementation guidance.
(a) Requirement. The authorized official should use the cost
estimating and valuation methodologies in Sec. 11.83 of this part
following the appropriate guidance in this section.
(b) Determining uses. (1) Before estimating damages for compensable
value under Sec. 11.83 of this part, the authorized official should
determine the uses made of the resource services identified in the
Quantification phase.
* * * * *
(d) Uncertainty. * * *
(2) To incorporate this uncertainty, the authorized official should
derive a range of probability estimates for the important assumptions
used to determine damages. In these instances, the damage estimate will
be the net expected present value of the costs of restoration,
rehabilitation, replacement, and/or acquisition of equivalent resources
and, if relevant, compensable value.
* * * * *
(f) Substitutability. In calculating compensable value, the
authorized official should incorporate estimates of the ability of the
public to substitute resource services or uses for those of the injured
resources. This substitutability should be estimated only if the
potential benefits from an increase in accuracy are greater than the
potential costs.
(g) Compensable value during the restoration, rehabilitation,
replacement, and/or acquisition of equivalent resources. (1) In
determining the amount of damages, the authorized official has the
discretion to compute compensable value for the period of time required
to achieve the restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources.
(2) When calculating compensable value during the period of time
required to achieve restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources, the authorized official should
follow the procedures described below. The procedures need not be
followed in sequence.
(i) The ability of the injured resources to recover over the
recovery period should be estimated. This estimate includes estimates
of natural recovery rates as well as recovery rates that reflect
management actions or resource acquisitions to achieve restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources.
(ii) A recovery rate should be selected for this analysis that is
based upon cost-effective management actions or resource acquisitions,
including a ``No Action-Natural Recovery'' alternative. After the
recovery rate is estimated, compensable value should be estimated.
(iii) The rate at which the uses of the injured resources and their
services will be restored through the restoration or replacement of the
services should be estimated. This rate may be discontinuous, that is,
no uses are restored until all, or some threshold level, of the
services are restored, or continuous, that is, restoration or
replacement of uses will be a function of the level and rate of
restoration or replacement of the services. Where practicable, the
supply of and demand for the restored services should be analyzed,
rather than assuming that the services will be utilized at their full
capacity at each period of time in the analysis. Compensable value
should be discounted using the rate described in paragraph (e)(2) of
this section. This estimate is the expected present value of uses
obtained through restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources.
* * * * *
(h) Scope of the analysis. (1) The authorized official must
determine the scope of the analysis in order to estimate compensable
value.
(2) In assessments where the scope of analysis is Federal, only the
compensable value to the Nation as a whole should be counted.
(3) In assessments where the scope of analysis is at the State
level, only the compensable value to the State should be counted.
(4) In assessments where the scope of analysis is at the tribal
level, only the compensable value to the tribe should be counted.
Subpart F--Post-Assessment Phase
18. Section 11.90 is amended by revising paragraph (c) to read as
follows:
Sec. 11.90 Post-assessment phase--Report of Assessment.
* * * * *
(c) Type B assessments. For a type B assessment conducted in
accordance with the guidance in subpart E of this part, the Report of
Assessment shall consist of all the documentation supporting the
determinations required in the Injury Determination phase, the
Quantification phase, and the Damage Determination phase, and
specifically including the test results of any and all methodologies
performed in these phases. The preliminary estimate of damages shall be
included in the Report of Assessment. The Restoration and Compensation
Determination Plan, along with comments received during the public
review of that Plan and responses to those comments, shall also be
included in the Report of Assessment.
19. Section 11.91 is amended by adding a new paragraph (e) to read
as follows:
Sec. 11.91 Post-assessment phase--demand.
* * * * *
(e) Statute of limitations. For the purposes of section 113(g) of
CERCLA, the date on which regulations are promulgated under section
301(c) of CERCLA is the date on which the later of the revisions to the
type A rule and the type B rule, pursuant to State of Colorado v.
United States Department of the Interior, 880 F.2d 481 (D.C. Cir.
1989), and State of Ohio v. United States Department of the Interior,
880 F.2d 432 (D.C. Cir. 1989), is published as a final rule in the
Federal Register.
20. Section 11.92 is amended to revise paragraph (b) to read as
follows:
Sec. 11.92 Post-assessment phase--restoration account.
* * * * *
(b) Adjustments. (1) In establishing the account pursuant to
paragraph (a) of this section, the calculation of the expected present
value of the damage amount should be adjusted, as appropriate, whenever
monies are to be placed in a non-interest bearing account. This
adjustment should correct for the anticipated effects of inflation over
the time estimated to complete expenditures for the restoration,
rehabilitation, replacement, and/or acquisition of equivalent
resources.
(2) In order to make the adjustment in paragraph (b)(1) of this
section, the authorized official should adjust the damage amount by the
rate payable on notes or bonds issued by the United States Treasury
with a maturity date that approximates the length of time estimated to
complete expenditures for the restoration, rehabilitation, replacement,
and/or acquisition of equivalent resources.
* * * * *
21. Section 11.93 is amended to revise paragraph (a) to read as
follows:
Sec. 11.93 Post-assessment phase--Restoration Plan.
(a) Upon determination of the amount of the award of a natural
resource damage claim as authorized by section 107(a)(4)(C) of CERCLA,
or sections 311(f)(4) and 311(f)(5) of the CWA, the authorized official
shall prepare a Restoration Plan as provided in section 111(i) of
CERCLA. The plan shall be based upon the Restoration and Compensation
Determination Plan described in Sec. 11.81 of this part. The Plan shall
describe how the monies will be used to address natural resources,
specifically what restoration, rehabilitation, replacement, or
acquisition of the equivalent resources will occur. When damages for
compensable value have been awarded, the Plan shall also describe how
monies will be used to address the services that are lost to the public
until restoration, rehabilitation, replacement, and/or acquisition of
equivalent resources is completed. The Restoration Plan shall be
prepared in accordance with the guidance set forth in Sec. 11.81 of
this part.
* * * * *
Dated: March 17, 1994.
Bonnie R. Cohen,
Assistant Secretary--Policy, Management, and Budget.
[FR Doc. 94-6749 Filed 3-24-94; 8:45 am]
BILLING CODE 4310-RG-P
